Equity is the difference between the price of your home and the outstanding amount on your mortgage. For example, if the price of your home is $ 500,000 and you owe $ 350,000, you will have an equity of $ 150,000.
Most real estate experts recommend having at least 20% equity before selling. Why?
- Covers transaction costs: Selling homes involves Real Estate Commission, Closing Cost and Possible Repair.
- Protects your profit: The more equity you have, the larger your cash-out after the sale.
- Helps with your next home: Equity can be used as a down payment on your next property.
If you sell with less than 20% equity, you will not have enough amount left after the cost, which can limit your purchasing power for your next step.
What is the Best Time of Year to Sell My Home?
Time can affect how fast your house will sell and how much you will get.
- Spring (March to May): Traditionally it is the best season to sell. Families are planning to change the house before summer, the courtyards of the house are looking green, and the demand is also high.
- Summer (June to August): There is still a strong market, but competition may increase. Great for houses with pools or external features.
- Fall (September to November): Buyers are inspired, but the demand starts slowing down.
- Winter (December to February): Usually the slowest time, though homes still sell. Less competition may benefit motivated sellers.
📌 In California, especially in warm areas such as San Diego and Los Angeles, the sale season is prolonged. Spring and early summer months live the hottest month for good earnings.
What’s the Quickest Time to Sell a House?
The speed of selling depends on location, price, and condition. On average in California, homes take about 30–60 days to sell in a normal market.
If you want to sell faster, here are options:
- Cash Buyer: Companies like Zillow or local "we buy houses" firms can complete the deal in 7-14 days.
- Well-priced listings: A slightly lower house than the market price may soon attract several proposals.
- Move-in ready condition: Fresh paint, clean interiors and minor updates accelerate sales.
If your target is to sell soon, cash buyers or investors may be the way, although you can also sell at slightly lower than the market price.
What is the 5-Year Rule for Real Estate?
5-Year Rules Real Estate has a general guideline: Do not sell your house until you have stayed for at least 5 years in it.
Here’s why:
- Build Equity: In the first few years of the first few years of mortgage payment, interest is paid, not the principal. Staying longer builds real equity.
- Offset Selling Costs: Real estate commissions and fees can eat into your profit. In five years your home gets time to get sufficient price to meet these costs.
- Tax Benefits: If you have been in your home for at least 2 years of the last 5 years, you can keep the capital gains up to $ 250,000 (or $ 500,000 for married couples) at the time of sale.
Although the 5-year rule is not a strict requirement, it is still a smart way to avoid losing money on your investment.
Key Tips for Selling Your Home
- Know your numbers: Calculate your equity before listing.
- Watch the market: Spring brings more buyers, but a motivated seller can succeed year-round.
- Price it right: Overpricing leads to long listings; underpricing may leave money on the table.
- Prepare your home: Staging, small repairs, and curb appeal make a big difference.
- Explore all selling options: Traditional listing, cash buyers, or even renting out temporarily if the market isn’t in your favor.
Final Thoughts
Selling a home depends partly on time, partially financial plan and partially strategy. Target at least 20% equity, consider selling spring or early summer for maximum profit, and if you want to take maximum advantage of your investment then remember the 5-year rule.
The position of each seller is different, so weigh your goals carefully - whether it is to get cash quickly, maximize the profit, or to time your move with family plans.
