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When to sell your Home – Getting the Timing Right.
There is no tried and true formula to establish when to sell your home because ultimately it all comes down to the Why? Understanding why you want to sell will 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.
You may need to sell to downsize, for financial reasons such as retirement, to upsize due to a growing family or because you have purchased somewhere else. All of these factors will influence when is the right time to sell.
That may, of course, mean that your property sale doesn’t correspond to the best market conditions or season, but that timing is more critical.
Top Reasons for selling:
1. Growing Family
You may have already grown the family, and discovered your home just doesn’t fulfil your needs or perhaps you have just discovered you have a new baby on the way. If you are keen to be settled before the baby is born, then you need to move quickly to get your house on the market. The average time homes are on the market can vary according to market conditions, but CoreLogic estimated this year it was between 30-57 days depending on what state you are in. Adding in a 42 days settlement period, and you need to get your skates on and sell quickly if you want to be settled in your new home by the time baby is born.
2. Tax benefits
You may be about to get hit with Capital Gains Tax and find you have earned too much for the sale of your investment property to be counted in this year’s income, so next financial year is better. Alternatively, you may find that your income is low enough that the capital gains tax implications will be more favourable, which means you need to have your property sold by the end of the financial year. Note however that Capital Gains Tax is only applicable to investment properties and should not be a factor in selling your principal place of residence.
If you are transferring for business, your timing depends on when you need to be in your new location, and whether you plan to buy quickly when you get there. If you plan to rent and can manage to sell from afar, then you have the luxury of being able to check favourable market conditions before you list, but if that is impossible, your timing comes down to when you need to move.
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.