Waiting to sell? There are good reasons to list now

With interest rates well under 5 percent, and home prices at or near rock bottom, the real estate mantra that "now's a great time to buy" seems like a bit of a no-brainer.

But is there any reason to sell right now? Plenty of consumers are holding off from listing their homes because they want a tidier profit. Pose that question — why sell? — to local real estate professionals, and they tick off a number of reasons, with caveats attached.

1. You really need to sell. It could be a job transfer or it could be a need to have less house or a smaller mortgage payment at a lesser interest rate.

A homeowner who has been in a property more than five years, and who didn't tap into a large home equity line of credit or a cash-out refinancing, still has a chance of coming out ahead. Keep in mind that buyers in the market during the fourth quarter typically are serious buyers.

2. You want to trade up. It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.

A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath.

But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.

Keep in mind the spread may be even greater. There's a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.

3. You want to live in a worse-hit market. It depends on the debt load carried on the current residence, but if you've dreamed of moving to a "sunshine" state like Florida, Nevada or California, your money will go far.

4. You're the new supply. There's an abundance of properties that have been sitting on the market six months or more, many of them with multiple price reductions. A home that has just come on the market, particularly if it's priced competitively, will get the attention of serious buyers tired of the existing inventory.

Bad timing: Last week, the White House said the president would not sign a bill that would have, according to critics, made it easier for lenders to reclaim ownership of homes in foreclosure.

The bill, the Interstate Recognition of Notarizations Act of 2010, would have required federal and state courts to recognize the work of a notary public on a document, even if the notary was licensed or commissioned in a state different from that of the court. It was introduced a year ago and was easily passed by the House of Representatives in the spring and by the Senate late last month.

That, of course, was before some of the nation's largest mortgage servicers began temporarily halting foreclosure sales, as it became clear that some of the paperwork on foreclosures may contain factual errors, and employees were signing off on cases without reviewing documents on property ownership.

"It is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized," communications director Dan Pfeiffer wrote on the White House's blog.

Final fix-it event: The last of six 2010 Fix Your Mortgage events is scheduled for 9:30 a.m. to 2 p.m. Saturday at Westinghouse College Prep, 3223 W. Franklin Blvd., Chicago.

Volunteer attorneys, city personnel and housing counselors certified by the U.S. Department of Housing and Urban Development will be available to help delinquent borrowers determine if they qualify for mortgage loan modifications.

Preregistration is encouraged. For more information, call 773-329-4185 or 773-329-4181 (Spanish). Doors to the event will close at 12:30 p.m., or when 1,000 people have been registered. If all goes according to plan, organizers say, about 2,300 families will have received help this year in applying for mortgage loan modifications.

Source: Chicago Tribune by Mary Ellen Podmolik