1. Personal Circumstance
Did you just get a new job? Is your second child on the way? You want your parents to live much closer to you? Are the mortgage payments too high? A significant change in your personal living situation may trigger either the need to sell, or the need to buy something new. While you might be able to keep your current property, rent it, and buy a new one, deciding whether to sell or keep it will be heavily influenced by your life circumstances.
2. Emotional readiness
There is also the attachment factor. If you have made several life-changing memories in your current house, it might be a little more difficult to let go. If it is too difficult to let go, maybe you should wait before selling. An emotional attachment that is too strong may influence your perception of the value of your house and might prevent you from reaching a compromise when negotiating with a potential buyer. While emotional attachment is normal, it can really hinder the sale of your house.
3. Market
Considering the market conditions in the sale of your property is also quite important. It will influence the pricing and marketing strategy but will also indicate how long you might need to wait before your house sells.
In the real estate sector, especially for residential properties, one way in which realtors qualify the market is whether it is balanced, a buyer’s market or a seller’s market. The market qualification relies on a few simple calculations. The first is called the Sales-to-New-Listings Ratio (SNLR). An SNLR of 40% or lower indicates a buyer’s market, and 60% indicates a seller’s market. Anything between those two numbers would be considered balanced.
There is also Months of Inventory (MOI). An MOI of 6 months or more indicates a buyer’s market (high supply), and an MOI of 4 months or less indicates a seller’s market (low supply).
Another one is the average time to sell. In a balanced market, the average time to sell a property is around 90 days. Anything under this figure shows an advantage to sellers and above would be to the benefit of buyers. The farther away from the balance, the stronger the indication of a type of market. Using those three indicators together can provide valuable information about your decision to sell.
Selling in a seller’s market brings important benefits to a seller. Because the supply is somewhat low and demand high, buyers are competing for houses. This might bring additional offers and will drive prices up. On the contrary, a buyer’s market will do the opposite. There will be a lot of supply and less demand, generating less visits and offers and potentially lower prices.
4. Financial implications
The financial aspect of the decision is obviously extremely important. The price at which your house will sell, the profit you will make, the fiscal implications, and the mortgage penalties you might pay are all factors that need to be considered. Generally, if you are selling a house you have lived in since you purchased it will be exempt of taxes. It is however very important to verify with your accountant or fiscalist that this is the case. Rental properties almost always sell with fiscal (tax) implications.
Knowing what your property is worth is usually difficult if you are trying to sell alone. It is always better to reach out to a realtor or a certified valuator to get a good understanding of the property value. The professional of your choice can prepare a Comparative Market Analysis (CMA) which will give you an important data point for your decision making.
As for international residents, it is critical to understand the fiscal implications of a sale. Depending on your tax residency, and potentially other factors, you may have unexpected fiscal impacts at sale. It is very important to verify those aspects before deciding to sell.
5. Condition of your property
A factor often ignored is the physical condition of your house. Are the walls blue and orange? Is the yard maintained? Are there cracks in the foundations? Was the roof redone forty years ago? All those factors, and many more, may influence the price of your property and your ability to sell it. Renovating a few specific things, or simply repainting in a more neutral color, may help you sell your property at the price you are looking for. And if you’re not sure about it, reach out to an experienced realtor or interior designer. They will be able to guide your efforts.
6. Local trends
While a slightly less important factor, knowing what is going on in your neighborhood may help guide your decision. If a new school is being built and the lack of schools is your main reason for moving, it might make you keep your property. If on the other hand your town is getting a brand-new international airport, you might want to get out of there and let someone with a higher appreciation of jet engine noises move in.
Takeaway
To be able to decide whether to sell your property or not, one of these factors may weigh more heavily. It is, however, important to consider your personal circumstances, your emotional readiness, the market, the financial implications, the condition of your property and local trends. If you are still unsure or need guidance with any of those factors, feel free to reach out to me and it will be my pleasure to discuss during a free consultation, which includes a free house valuation.