Selling your home is a decision that naturally involves both emotional and financial introspection. Picking the optimal time to sell amidst life-changing events such as a career change or family factors is crucial to extracting the maximum value from your asset. If you sell too early, you may lose out on growing your equity down the line. But if you sell too late, you could risk selling at a loss.
Today, we’ll be diving deep into all the factors that must be considered when deciding to sell your home. We’ll be covering everything from reading the real estate climate, market conditions, and seasonal considerations, all the way through to understanding your family’s circumstances better to determine whether selling is the right decision for you and your loved ones. Continue reading as we guide you through the process.
Quantify Your Equity
The difference between your home’s market value and the outstanding balance of your mortgage is a metric known as equity. It describes the potential profit you could make from selling. You can consult with a real estate agent experienced in conducting home appraisals to estimate your home’s current market value.
Then, review your loan statements to determine the remaining balance owed. Use an online mortgage calculator to calculate the gap between your property’s value and the outstanding balance on your home loan. The larger this gap is, the more equity and leverage you possess in the sale.
Read the Market
Real estate is a dynamic market to invest in as it’s influenced by a lot of complex and multi-faceted variables (i.e.local development, housing demands, economic climate, and interest rates, just for starters). For relevant comparison purposes, access local data concerning recent sales in your neighbourhood dealing with homes comparable in size to your property. Use this as a baseline for appraisal purposes.
Then, consider the prevailing economic climate within your locale. A seller’s market is where housing demand exceeds the supply. If that’s the case, then property values will rise and help maximise your investment return. Conversely, in a buyer’s market, you’ll need to price competitively and highlight your home’s unique value propositions regarding location, age, and upgrades completed.
Seasonal market swings are also significant, with each period bringing distinct pros and cons. Spring leads the way with longer daylight and buyers eager to get outdoors for extended home viewing. Summer is prime time for families with children to complete moving house, as the kids are on break from school activities.
In fall, serious buyers are looking to finalise purchases before the cold weather moves in and the holidays begin to preoccupy people with celebrations. Be aware of how the climate could influence buyers’ perception of your home’s features. Understanding the seasonal market gives you the tools for strategically timing the showing of your home with the hopes of maximising its return value.
Life happens, people grow older, and as a result, their lifestyle needs tend to evolve over time. These changes often influence our housing needs; we start families and need bigger living spaces.
Contrastingly, as we age, the children move out, and home downsizing often is the prudent choice. You may be looking to sell your home because it’s too big for you in your retirement years. Or you may be looking to capitalise off your equity to fund your retirement. If this is the case, you may benefit from waiting for the right time (i.e. when property prices have risen or plateaued). Even if you’ve been living in your home for thirty years and have grown your equity ten times over, you can still benefit from maintaining a strategic approach and practicing patience when preparing to sell.
No matter where you may be in life, chances are you’ll know precisely if the time for change has arrived based on your lifestyle factors. Just be sure to ask yourself if your current house aligns with your preferred lifestyle or budget for more clarification. Does the community offer the amenities your family needs? Is the commute tolerable, and are the schools acceptable? These family-centric considerations will help answer whether moving house is appropriate right now.
Making Your Final Decision
The final decision draws near as you weigh options and answer critical questions about your lifestyle and financial position. A helpful strategy for choosing is to write down a brief pros and cons list outlining the ramifications of selling right now.
A list of pros might look like this:
Financial Gain – We covered how to use an online mortgage calculator and work with your financial advisor to assess your equity and arrive at a fair profit based on current market conditions. On top of this, prospective sellers should also determine whether they’re in a buyer’s or seller’s market, and choose the optimal season for listing their home for sale or even if they’re seeking expressions of interest.
Lifestyle Improvement – Assess how moving and selling affects your family’s needs and evolving life transitions.
Contrastingly, your cons list may look a little something like this:
Market Challenges – Evaluate potential obstacles such as a buyer’s market, your home’s condition (needs repair, age, less than ideal location), and economic uncertainty.
Emotional Challenges – Gauge the emotional effects of the change, such as a new environment, kids having to leave current friends and make new ones, or increased maintenance responsibilities for you and your spouse if the new home is a fixer-upper.
Logistics Hassles – Predict the challenges of moving house, including packing, renting transportation, finding helping hands, and settling into a new space.
Timing Concerns – Assess if future external factors, like another job change, recession, or neighbourhood decline, could affect the timing and value of your move.
Be sure to weigh up all your own personal pros and cons before making your final decision. That way, you’ll be able to determine without a shadow of a doubt whether it’s the right time for you and your family to sell your home.
Closing the Sale
By combining your own thoughtful analysis with the expertise of professionals, you can confidently make the decision to pull the trigger on selling your home when the time is right. Moving your family and beginning life’s next chapter is never easy. Knowing that you’ve considered all the relevant data and are well-prepared for the journey ahead assures that you’ve planned for any outcome.