When is the Right Time to Sell Your Home?
There is no tried and true formula to establish when to sell your home because ultimately it all comes down to the ‘why?’
There seems to be a general market consensus that Spring/Summer are the right seasons to sell your property. The reality is, people successfully buy, sell and rent property all year round. One variable that always throws spanners in the works are occasional market declines, but we have tips for those tough times too.
Understanding why you want to sell will ultimately help you determine when the time is right. You should always consider your objectives, your ability to purchase or afford a new property, and whether there will be any Capital Gains tax implications for selling an investment property.
There are also plenty of ‘life events’ that may push you to sell your property. Maybe you need to downsize for financial or retirement reasons? Maybe you need to upsize due to a growing family? All of these factors will influence when is the right time to sell.
Here are the most common reasons why people decide to sell their properties. We’ve also included some pro tips for you to mull over should any of these situations apply to you.
1 – Growing Family
Perhaps you’ve just discovered you have a baby on the way. Or, maybe your family has already grown but you’re beginning to feel your home just doesn’t fulfil your needs anymore.
The average time properties spend on the market is 90 days. If you are keen to be settled before your newborn arrives, then you may need to act quickly. Keep in mind settlement periods can be 30, 60, 90 days so be sure to optimise your property advertising strategy effectively.
2 – Tax Benefits
Always be cautious of tax implications if you’re selling an investment property!
If you’ll earn too much by selling your property to be counted in this year’s income, it may be best to wait until next financial year to avoid getting hit with Capital Gains Tax. Alternatively, you may find the opposite – if your income is low enough that the Capital Gains tax implications are more favourable this year, get your skates on!
Note, however, that Capital Gains Tax is only applicable to investment properties and should not be a factor in selling your principal residence.
3 – Relocating
If you are moving for work-related reasons, your timing depends on when you need to be in your new location. It will also depend on whether you plan to buy quickly before or upon your arrival. If you plan to rent and can manage the sale of your property from afar, then you have the luxury of being able to check favourable market conditions before you list your property on the market. However, if that’s not possible, your timing comes down to before your move date.
4 – Downsizing
If you are downsizing because the kids have moved and you just want something smaller, then you have some time to make sure market conditions are right, and you may see a capital gain (profit), which may either enable you to buy a more beautiful smaller home, or put some of the profits into a retirement fund.
5 – Cash Profit
If you are selling to realise a profit on your initial purchase price, you need to time the sale to when the market is favourable for you – that is when the market across your city or suburb has seen an overall increase in house prices. The best way to work this out is to watch the local housing market and check out recent sales prices for comparable homes.
6 – Change in Relationship Status
Timing to sell will differ depending on whether you are experiencing a relationship break-up, or whether you have paired-up. Perhaps you need to sell as you have been widowed. If the relationship break-up is acrimonious, you may be keen to move quite quickly. If it is amicable, you may have the luxury of making sure market conditions are favourable. If you are recently partnered, it is worth taking the time to ensure you are maximising your sales price so you can afford something bigger and better. And for those sadly widowed, the timing hinges on how well the surviving partner can manage in the existing house, whether there are any probate issues and knowing what you want the next chapter of life to look like. Sometimes these decisions just can’t be rushed.