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 or Summer is 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 when selling your 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 the right time to sell.
Here are the most common reasons why people decide to sell their properties. We’ve also included a few pro tips as food for thought if any of these situations apply to you.
Welcoming a Little One
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. This may mean dropping a few extra dollars to ensure you have a prominent position in online search results or deciding to sell by auction.
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 the 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 and get going!
However, please take note that Capital Gains Tax is only applicable to investment properties and should not be a factor in selling your principal residence.
If you are moving for work-related reasons, your timing will likely depend on when you need to be at your new job. It will also depend on whether you plan to buy quickly beforehand or upon your arrival. If you plan to rent a property in your new location and can manage the sale of your property from afar, then you have the luxury of time, enabling you to wait on favourable market conditions before listing your property on the market. However, if that’s not possible, your timing comes down to before your move date.
Time to Downsize
If you are downsizing because the kids have moved out and you simply want a smaller, more manageable property then you have some time to make sure market conditions are favourable. Plus, you may see a capital gain (profit), which would either enable you to buy your new home at a higher price point or put the profits into a retirement fund.
If you are selling to realise a profit on your initial purchase price, you need to time your 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 homes comparable to your own.
Pair-ups, break-ups and being widowed – all of which can have a significant effect on your living situation causing you to sell your home.
If you are recently partnered, it is worth taking the time to ensure you are maximising your sale price so you can afford something bigger and better with your new love.
If you’ve broken up with your partner and it’s a nasty one, you may be keen to move quite quickly. However, if it’s amicable, you may have the luxury of making sure market conditions are favourable. And for those sadly widowed, your timing likely hinges on how well you can manage in the existing house, whether there are any probate issues and what you want the next chapter of your life to look like. Sometimes these decisions just can’t be rushed.
Wrapping it Up
At the end of the day, the right time to sell your home depends on your personal situation. Your circumstance will generally guide how fast you need to sell your property, which intern influences the way you choose to sell your home and how much you will spend to do so.