Selling a Home > When Should You Sell?

Your answer to this question may be "Right away!" If you've taken a job in another city or you've made an offer to purchase another home, selling your home fast is your main goal. Most people, however, have some flexibility in deciding when they should sell their home. Let's take a look at the factors that can go into this decision.

HOW QUICKLY MUST YOU SELL?

Once you've decided to sell, you probably want to complete the process as soon as possible. But you also want to sell your home for the highest price you can obtain. In a "seller's market," where many buyers are competing for relatively few homes, speed and top price can go hand-in-hand. However in a "buyer's market," when purchasers can take their time to choose among several properties, you may discover there is a trade-off between speed and price. I can help you decide upon an asking price that will also help meet your timing requirements.


CYCLES IN THE REAL ESTATE MARKET

Over the long term, residential real estate is one of the best investments you can make, while providing you and your family with shelter and a place to accumulate fond memories. But there are cycles in the market that may affect your decision regarding when to sell. These cycles can create a shortage of homes (which will usually push up prices) or a surplus of homes (which can result in a slowdown of rising prices or even price reductions).What drives these cycles? The overall economy is the most obvious answer. In periods of economic growth when employment is strong and people have confidence about their futures, demand for housing is high. When there is a downturn in the economy however, unemployment increases and more homes are put up for sale - at the same time potential buyers are waiting for things to improve.Some people are concerned about trading up to a larger home during a buyer's market and perhaps "losing" some of their home's equity in the sale. Although the current market cycle should always be part of your decision, remember that while you may sell your house a discount, it is likely you'll purchase your new home at an ever greater discount. And then you'll own a larger asset with even greater potential for appreciation.

THE 'SEASONALITY' OF HOME SALES

Fewer buyers may be willing to trod through snow drifts to look at homes for sale during winter months, but the buyers that do - are the serious buyers that need to buy now! You'll also be competing with fewer houses on the market and of course 'supply and demand' kicks in. Conversely, spring tends to be an active time for real estate sales. Homes and gardens start looking good again, and parents with school aged children particularly like to buy in spring. Homes are sold throughout the year, so think of the season as only one factor in determining when you'll put your house on the market.

BUY FIRST OR SELL FIRST?

If you purchase you new home before you reach an agreement to sell your current property - and the sale falls through - you may find yourself owning two homes at the same time. Many people are able to time their sale and purchase to happen on the same "closing date". As a measure of safety, you can make your offer to purchase your next home "conditional" on the sale of your present home within a specified amount of time (although you lose some negotiating power by doing this). It might be better to negotiate for a longer "closing period" on your home sale - giving you more time to find and purchase your next property.

BRIDGE FINANCING

If you have made your offer to purchase conditional on the sale of your current home and the seller receives another offer, you may be forced to commit to your purchase within a few days or watch your dream home slip away. One way to avoid this is to arrange "bridge financing". If your lender is confident your home will sell in a reasonable period, they may advance you the money to make a down payment on your dream home, using the equity in your current home as security.