KEY FACTORS TO CONSIDER WHEN SELLING A HOME

KEY FACTORS TO CONSIDER WHEN SELLING A HOME

Category Market Advice

For most people, our homes are the biggest investments we'll ever make and, when the time comes to sell, it's understandable that home owners will want to sell as quickly and seamlessly as possible whilst achieving the best possible return on investment.

However, when listing a home on the market, it's impossible to know exactly how long it will take to sell or for what price and the closest one can get to a ballpark timeframe and selling price is by looking at recent comparable sales in the area.

There are numerous which will impact the sale of your home and, whilst you cannot change their influence, it is possible to have at least a modicum of control if you do a little homework and take the following factors into account:

The current housing market

If you are planning on selling, you should always take the time to understand what's currently happening in the housing market and this can be done very simply by determining the following:

• Is it a buyer's or seller's market? If there is high demand and low stock (seller's market), you can price your home on the high end and be confident that it won't take too long to sell, but if the market is slow, you need to price your home more competitively and be open to negotiations.
• How are property sales doing in your area and how long are homes remaining on the market? Not all markets fare the same and, for instance, if you live in a sought-after area near good amenities and schools, the market in your specific area could be a seller's market even though the general market is flat.

Economic indicators

The broader economy also impacts the housing market, especially if there is a downturn and employment or wage growth slows, because then fewer people are able to afford a home and there may also be less people looking to relocate for new opportunities.

Are interest rates high or low? As a rule of thumb, the lower the repo rate, the larger your buying pool as people usually view lower interest rates as a window of opportunity to invest. It's also when more first-time buyers try to get a foot on the property ladder.

And, if you are considering selling to upgrade to a more expensive home, then the best time to do so without enduring a significant increase in your monthly financial obligations, is when rates are low.

Generally, as inflation and interest rates increase, funds available to potential buyers for bonds decrease and it becomes more difficult to qualify for home loans which, in turn, affects demand and, consequently, house prices too.

Timing

Bearing all this in mind, it would be ideal to be able to sell when market conditions are perfect and you are able to yield the best possible financial return, but there is seldom a perfect storm and for most sellers it's also not practical to wait for the market to improve significantly.

That said, if you keep abreast of economic news and understand the market, then it's worth waiting a short time until interest rates are lowered as predicted or until the new development being built next door is completed.

Also, keep in mind that the market in which you're selling is also the market in which you're buying, so if you are selling to buy a new property, it's a case of swings and roundabouts.

Seasons

It's worth remembering that seasonal demand also applies in the housing market. Although it's understandable to think that winter may be a better time to sell as people as people are in hibernation and spending more time online, possibly searching for homes, the cold may well deter them from actually venturing out to view properties and it's also when most of our homes aren't looking their best.

The fact of the matter is that most homes look better during the warmer months when gardens are flowering and rooms are naturally lit by the bright sunshine. Statistics also show that this is when homes listed online receive the most amount of interest from potential buyers.

However, if you can't afford to wait for your garden to bloom, you will just have to make the most of your home's attributes to entice buyers. Light the fireplace, place a bowl of fresh flowers in the entrance hall and make sure it's uncluttered with personal effects.

The right price

A key factor when selling a house is its price tag and, because the value of a home is largely based on what willing buyers in the market will pay for it, it's critical that you price your home correctly from the get-go.

Listing your home for the highest possible price may seem like the right thing to do as we expect buyers to initially negotiate it down, but unfortunately it doesn't work that way.

When buyers have as much choice as they currently do, value for money is a priority and they will usually opt for a similar home at a better price if you've priced your home at the top end of the spectrum. And, if your home spends too long on the market, potential buyers will begin to wonder what is wrong with it.

It's therefore essential to know what your property is worth and a good place to start is by checking the recent sale prices of other homes in your area on property portals like Property24.

Ultimately, being aware of these critical factors that influence your home's value will not only enable you to sell it quicker and at a better price, it will also help you to avoid many of the common home-selling mistakes which often come with their own costs.

Author: Lew Geffen Sothebys International Realty