Should you sell?
When deciding to sell your home, it is important to understand whether you are in a seller's market (with few houses for sale and rising prices), or a buyer's market (with lots of houses for sale and depressed prices). It is also important to understand what kind of homes sell best in your area.
If you are not under pressure to sell, you should consider factors such as:
- Financial impact
It costs thousands of dollars to sell a property and relocate - including real estate commission, legal fees, and moving costs. The less equity you have in the house, the greater the financial impact. You should work out this financial impact before deciding to sell.
You should consider the timing of your sale taking into account the state of the property market and the equity in your home. A buyer's market may negatively affect your sale. If your equity is low, will the sale result in you being able to repay your lender. The greater the equity you have in your home, the better equipped you are to cover your sales costs.
- Tax consequences
Are any capital gains taxes payable on real estate profits in your country? Make sure you know where you stand.
- Alternatives to selling
If you are selling to get away from crime, troublesome neighbours, or because you want more space, do a reality check. A look at crime statistics may show you're safer than you would be in a new neighborhood; and a tall fence could shield you from neighbours. Renovating your current home could give you the extra room you want.
Should you sell or improve?
Selling a home costs money. In addition to selling and moving costs, it will cost substantially more if you have to purchase new appliances and furniture for your new home.
If you do not have to sell immediately, carefully consider whether you should sell - especially if it is a buyer's market and you won't get top price for your home.
You should consider whether you can renovate your home to better suit your needs.
- What is your house's condition? Does it have any major problems?
- Make a list of the improvements you want, then get cost estimates from a builder.
- Will the cost of the renovations add more than that amount to the value of the home? Improvements do not always translate into higher resale value.
- Be realistic about what the renovations will achieve.
Find out what your property is worth
Your property's value is what a buyer is willing to pay at any given time. Your final selling price will depend on many factors:
- If you want to sell quickly or you are in a buyer's market, you may decide to set your price lower than market value.
- On the other hand, if you are in a seller's market, you may want to set your price higher than market value.
To arrive at a price:
- If you are going to use the services of a real estate agent, interview several before you choose one. Ask them to give you an assessment of your property's value.
- Obtain a comparative market analysis. A comparative market analysis should take into account repairs, improvements, and annual costs of your property, in addition to its size, features, and amenities. It should contain an analysis of recently sold, comparable properties in the neighborhood, and a list of comparable properties currently for sale.
- Get an appraiser or registered valuer's report. If you want confirmation of the list price you have in mind, get a pre-sale valuation or appraisal. Registered valuers and appraisers use comparable sales in addition to other information to make their determinations of the market value of your property.