Real Estate Me

Should You Sell Your House?

Deciding to sell a home is the largest financial decision most people will make in their lifetime, so it’s natural to be a little anxious as you approach the selling process. Don’t worry, you’re not on your own. Read on to learn if conditions are right to put your home up for sale.

Decide Why You Want to Sell

Planting a “for sale” sign in front of a house might seem like the beginning of the home sale process. The truth is, it’s only one step of a journey that typically starts weeks or even months earlier. Setting a price, listing a home for sale and showing the home to potential buyers are all vital steps, but perhaps the most important step is the first one: clarifying your goals and making sure it’s the right time to sell.

Before you move forward with selling your home, start by answering these questions:
Why do I want to sell?
What will a new home offer that my existing home does not?
Do I need to sell within a certain amount of time?
How much preparation or repair work is needed to sell my home?
Do I have enough equity in my home to make a down payment on a new
house and/or achieve other financial goals?
Is making a profit on the sale of my home a must? If so, how much of a profit?
Where will I live next?

The answers to these questions can help you figure out whether you should sell now or wait for a better opportunity. When you get to the financial questions, take these three steps to make a fully informed decision.

Gauge Your Current Finances

When you sell a home, you’ll need to cover several costs throughout the process. Your first order of business? Do some math to help you understand approximately how much money you’ll have to work with before purchasing your next home. To do that, calculate the equity in your current home. Here’s how:

Determine the Current Value of Your Home

If you aren’t sure about the value of your home, you’ll need to come up with a solid estimate. There are several ways you can approach this. One is to simply hire a professional appraiser to examine all the data on recent nearby sales. They’ll also factor in your home’s size, features, age, condition, location and other traits to provide an unbiased estimate.

Another way is to ask a real estate agent for a comparative market analysis (CMA). A CMA is a detailed report on recently sold homes in your neighbourhood. The information in a CMA will help guide you to a competitive asking price. If you’re willing to put in a little time and do the research yourself, you can conduct your own comparative market analysis.

Find Out What You Owe Your Lender

Once you have an estimate, check out your current mortgage documents for the amount you owe your lender, including any second mortgage or line of credit you might have as well. Now you can subtract what you owe from what your house is worth to get a rough idea of your equity.

For example: if your home is worth approximately $665,000 and you owe $235,000 to your mortgage lender, you have $430,000 of equity ($665,000 – $235,000 = $430,000).

Figure Out Your Net Equity

Your net equity is your total equity minus the expenses you expect to pay as you move through the selling process, including:

Home repairs or improvements
Listing fees if you sell your house by owner or seller’s agent commissions if
You hire an agent
Appraisal fee

At this point, take a long look at the condition of your home. Gauge the investment you’ll need to make before listing. Identify the repairs your home needs before you put it on the market and what kinds of upgrades would help you sell more quickly.

Once you have these numbers, add them up on a spreadsheet to see where you stand. If you hire an agent to sell your home, your spreadsheet for that $665,000 home could look something like this:

Total equity (ex. $430,000) minus the following:

Home repairs/improvements:

$25,000

Traditional Agent Commission:

$24,625

Appraisal:

$300

Conveyancing Fee:

$1,500

Moving:

$1,500

Other fees (inspection, etc.):

$500

NET EQUITY:

$376,575

Whatever your circumstances are, establishing that net equity number is a critical part of making your home selling decision. This will help determine if you’re in good position to move forward and what the best method for selling your home will be.

Consider Your Home Selling Options

Before you sell your home, take some time to think about the answers to the questions below. Once you do that, you’re one step closer to deciding if it’s the right time for you to sell.

Should You Sell with an Agent or on Your Own?

Your home-selling strategy and the proceeds you can expect to receive from your sale will revolve around your decision to hire an agent or sell your home on your own.

Hire an agent and your home will likely be seen by a high number of potential home buyers instantly. On the flip side, you’ll probably need to pay commission fees when your home sells. Sell your home completely on your own and you won’t have to pay commission fees.

Whichever option you decide, chances are the process will involve considerable effort on your part. Either way you’ll be responsible for gathering most of the relevant documents and getting your home ready to sell. You’ll also need to order and pay for any pre-inspections or appraisals.

If maximizing your profit is key to your decision to sell, selling it yourself may be the way to go. If selling your home fast with minimal effort is more important, hiring an agent is probably a better option.

Should You Sell Your Current Home or Buy a New One First?

A big part of the decision to sell your current home is figuring out when you should buy your next home. There’s no right or wrong answer for whether you should buy or sell first. For some, it boils down to preference. Some people do everything they can to avoid the stress of carrying two mortgages for a time. If you decide to buy before you sell, that is most likely what you’ll need to do. Others are more resistant to the notion of being “homeless,” which is unavoidable if you sell before you buy.

If you’re open to either scenario, looking at your current housing market can help you decide. In a buyer’s market, you have a better chance of making an offer on a home contingent on the sale of your current home. That means you can secure a purchase and have the home waiting for you while you go through the selling process. If you’re in a seller’s market, homeowners can be a lot more selective about the offers they receive. That means they’ll be far less likely to accept a contingency that forces them to wait around.

When Is the Best Time to Sell my House?

Use property insights on homes.co.nz: this free interface allows you to easily track a property (including your own) to get estimates on how its market value changes over time.

Keep on top of property news: the real estate markets are constantly evolving and responding to changes in the broader economy. We highly recommend keeping your finger on the pulse throughout the selling process by following our online property news.

Where Will You Live Next?

Seems pretty basic, but sellers need to be just as prepared to move as to sell. Whether you plan to purchase or rent, you need to be on the lookout for your next home as soon as you’ve decided to sell. Take these steps to prepare for your new life:

Decide on your target neighborhood(s) and start researching properties that
are on the market or available for rent.
Look over listings online and in the local newspaper to help you identify
properties you’d like to visit.
Develop a solid idea of what you will be able to offer when you have identified
a home you like.
Research lenders and their current interest rates.
Once you’ve selected a lender or two that you feel good about, talk to a loan
officer about getting pre-qualified, or better yet, pre-approved for a loan.
Visit open houses and arrange showings for you as a buyer so you can start
to narrow your search.

Decide on a List Price

You may have a solid estimate of your home’s value, but setting your asking price will take some research and consideration. The amount you land on may determine if it’s the right time for you to sell or not. One of the advantages of working with an agent is that you’ll have a market expert to help you arrive at a precise, competitive asking price. Without an agent, getting the price right might seem like a major hurdle. It’s true that you’ll need to do a little extra legwork. However, determining an optimal price is actually a fairly simple process.

Researching homes that are “comparable” in your local market is the key. Find out what your home is worth using these free tools:-

https://www.propertyvalue.co.nz/

https://homes.co.nz/insights

https://www.qv.co.nz/

Checklist: Deciding if You Should Sell

Access your financial position.
Decide on your home sale method.
Decide where you will live next.