If you’re thinking about selling your home, or anticipate that you may end up having to sell during these less than fortunate times, these questions can shed some insights on your next steps:
1. Am I planning to buy a house at the same time?
While our current economic climate may not offer the most favourable conditions for sellers, buying during this time can be an appealing prospect. If you’re looking to purchase a new home following the sale of your current property, a reduced price on your next investment may help to soften the blow of a not-so-perfect deal on the one you’re leaving behind.
2. Can I afford to sell?
We all know it costs money to sell. While accepting a lower profit margin is one thing, the ability to cover your expenses is another. A real estate agent will help you establish a fair listing price for your home if you decide to go ahead with the sales process, but it’s vital to have a concept of how your net proceeds will look in relation to the costs of selling. Here are some fees to consider:
- Bond cancellation
- Rates, taxes and levies
- Compliance certificates
- Estate agent fees
- Repairs and maintenance
- The remaining balance on your mortgage loan
If a quick look at initial numbers reveals that you may make a loss if selling sell your home during a recession, then you should wait. However, this isn’t always feasible and if you have no option but to sell regardless of loss, your agent can help you navigate your options.
3. What’s my opportunity cost?
Is there a new job in the pipeline? If selling your home to move somewhere closer to work, will save you ample petrol costs, then it could be a convenient move.
Do you need more rooms? Motivation to sell is often quite high when a family grows beyond the comforts of a two-bedroom home.
Are you downsizing? Hoping to move closer to your parents? Looking to trade your apartment for a town house to pursue your gardening passions?
Sometimes, the ability to take a good opportunity overtakes the downsides of selling your home for potentially less money than it could make in healthy market conditions. Ultimately, only you can determine the answer to the question of opportunity cost.
The bottom line: Selling your property during a recession is possible and has several benefits. While you and your estate agent will have to work together closely to overcome some challenges that come with selling your home during an economic slowdown, it’s definitely worth it if you do it right.
You’ve decided to sell. Now what?
Your next steps are to make sure that your house is as ready for the market as possible.
Though this may feel like a daunting task if you’re already on a tight budget, there are several ways to make the most of your time and finances to help your house stand out when selling in a recession.