Thinking of Selling?
There are a million different
reasons why people sell their homes, but every seller has one thing
in common: the desire to get as much money as possible from their
existing residence as quickly and as hassle-free as possible. (If
your home is your principal residence, you won't have to pay capital
gains tax on any profits from the sale. If, on the other hand, it is
an investment property, prepare for the tax man!)
Before you begin the selling
process, really evaluate why you're moving. Do you have too few
rooms, or too many? Has your job moved to another city and you're
relocating? Are the neighbours driving you away? Or are you simply
looking for a change? A complete analysis of your current position
will set a good foundation for your next home hunt.
When is the Best Time to Sell Your
Home?
Everyone seems to have specific
ideas on when the right time is to sell. Some base their theories on
the overall economy, while others will tell you that there are key
buying months that you'll want to capitalize on.
If you're not buying and selling
strategically or for investment, the best time to sell is really
when you feel your existing home will not meet your future needs.
The best reason to purchase a new home is to take advantage of your
family and lifestyle changes. Do you wish to be closer to a school?
Are you switching jobs? Do you have an aging parent to care for?
In Canada, weather and holidays do
play a factor. Almost no one goes house hunting around Christmas,
and few give up their summer vacations. Of course, those with
school-aged children are less likely to move during the school year
and summer is an ideal time. In some areas, there is a definite
"spring cycle" -- perhaps it's a bit of spring fever and a wish to
break out of the bonds of winter.
Some gamblers look for winter
bargains and then try to sell their homes during the spring cycle.
But overall, that could be more tension and aggravation than you
wish. And the monetary results may be disappointing.
Another key factor to consider is
the economy. Are interest rates higher or lower in comparison to
your current mortgage? If they are higher, you may want to stick
with your current home, as your new mortgage payments could be
uncomfortable. If rates are lower, you might be able to trade up to
a more expensive home without a significant increase in your monthly
mortgage obligation.
What's more, if it's a buyers'
market, you may be in a strong position to purchase a new home,
especially if you have accumulated some equity in your current
property.
Are There Costs Involved in
Selling?
Unfortunately, the answer is yes.
Even if you think your home is perfect, you may have to do some
minor repairs or upgrades to make your home more attractive to
potential purchasers.
-
A professional home inspection
may be a condition of the offer. If the
inspection points to problems, your purchaser may ask that you
make the
necessary repairs or choose not to close the deal.
-
Closing costs, such as lawyers'
fees or unpaid taxes, will also have to be paid.
-
Mortgage discharge fees may be
levied by your lending institution.
-
Sales commissions must be paid.
They usually amount to 6% of the selling price.
Buy or sell first?
That's tricky. After all, if you
find a purchaser for your existing home, before you've found a new
one, you may find yourself living out of a suitcase if convenient
closing dates can not be negotiated. On the other hand, if you find
your dream home before you've unloaded your old one, you may be
faced with carrying two mortgages for a time.
So how do you manage? Easy. Do your
homework and have a good idea about the neighbourhood and type of
home you're looking for. Do an honest evaluation of your family's
needs and budget.
Speak to your Real Estate Sales
Representative and start your new home search as soon as your
existing home hits the market.
If you've found a home, before
you've sold your existing one, use "sale of your existing home" as a
condition on your offer. If you don't sell your house within a fixed
period of time, you can choose not to go through with the offer.
This, however, is a difficult condition for many vendors to agree
upon and you may find that you have to forgo your price negotiating
power.
Purchasing a home before you sell
could be a risky strategy if you're counting on the proceeds from
the sale.
If you've found a purchaser before
you've found your next home, use "purchase of a new home" as a
condition when you sign back the agreement. Again, it will only be
for a fixed time. Even if you have not found the ideal next house by
the time the deal closes, you may still wish to proceed with the
offer. As a buyer with a "sold house" you will be in a better
position to negotiate price.
There are a million different
reasons why people sell their homes, but every seller has one thing
in common: the desire to get as much money as possible from their
existing residence as quickly and as hassle-free as possible. (If
your home is your principal residence, you won't have to pay capital
gains tax on any profits from the sale. If, on the other hand, it is
an investment property, prepare for the tax man!)
Before you begin the selling
process, really evaluate why you're moving. Do you have too few
rooms, or too many? Has your job moved to another city and you're
relocating? Are the neighbours driving you away? Or are you simply
looking for a change? A complete analysis of your current position
will set a good foundation for your next home hunt. |