There are several important issues that come into play when determining if it is the “right time” to sell your home, and examining your reasons for wanting to sell may help you decide.
The most common reasons people sell their home include changes to their financial status, an employment transfer, a growing family, or retirement. Today’s record low interest rates have also made it attractive for many homeowners to “move up” to a larger home.
Whatever your reason, selling a house is a complicated procedure that involves large sums of money, and while some tackle it alone, it’s best to have a qualified real estate professional on your side.
Which Market is Best?
Real estate is subject to the law of supply and demand which creates cycles in the market. A shortage of homes generally means prices rise. This cycle is commonly known as a “seller’s market.” Alternately, a surplus of homes can result in a slow down in home sales or even a reduction in prices and is often referred to as a “buyers market.”
Obviously, you will want to sell your home quickly and for the highest possible price. In a seller’s market you often see many buyers competing for the same house resulting in top prices—sometimes even over the original list price. However, if you are planning to purchase another home after the sale, chances are you will be competing in the same seller’s market faced with higher prices.
In a buyer’s market you may find you have to wait longer to sell your home for a fair price. The upside to selling your home in a buyer’s market is you’ll have more selection and pricing options when you go looking for your new property.
Although the current market cycle may influence your decision to sell, remember there are trade-offs to selling in either a buyer’s or seller’s market. Some people are concerned that if they trade up to a larger home in a buyer’s market they will lose some of their home’s equity in the sale.
But while you may sell your home at a “discount,” it’s likely you will purchase your larger home at an even greater discount. The advantage is you then own a larger asset with even greater potential for appreciation.
Seasonality
Changing seasons and the weather can affect buyer demand. For example, fewer buyers may be out looking at homes during the cold and snowy winter months, but as a seller you will be competing with fewer homes on the market.
Spring tends to be an attractive time for real estate sales as gardens start to look nice again and people come out of hibernation. Buyers with school-aged children like to purchase in the spring so they can move in over the summer. However, homes sell throughout the year so think of the season as only one factor in deciding when to sell your home.
This article is provided by local REALTORS® and the Ontario Real Estate Association for the benefit of consumers in the real estate market.
