Am I better off selling?

Have you thought about what you might be able to get for your home, or dreamt of the possible opportunities that could open up if you released the funds tied up in it?

If not, perhaps give it a try. Most people only ever put their homes up for sale when something changes in their life (kids, jobs, spouses, etc.) – this means that they don’t want to sell, but they need to sell. Which isn’t ideal.

Am I better off selling?

Deciding to sell a home can be a tough call. It’s easy to get sentimental, and to think of the property as a personal belonging rather than as an asset. This can be particularly hard if deep down we want to sell, but we just can’t bring ourselves to do it.

If this sounds like you, then hopefully this post will give you a couple of things to think about.

If you don’t want to sell, ever, then this probably isn’t for you. I’m not going to try to convince you to let go of a home you truly love and hold dear if you don’t want to!

So with that out of the way, let’s begin.

The big question: Why do people sell?

It’s important to know what is driving your decision to sell.

Investors aside, there’s one reason that drives the overwhelming majority of houses being put on the market: change of lifestyle.

You might be upgrading or downsizing. You might have a growing family, or need to move because of work. It could be anything really, but the one uniting factor is that most people sell because of changes in day-to-day life.

So, without being too presumptuous, the above reason will apply to most of you who have considered selling. However, my point is – and please don’t take it the wrong way – this isn’t often a good reason for selling.

Here’s why.

Want vs. need

This whole issue is pretty simple if you break it down into two words: want and need.

If you’re selling because something in life has made it necessary, you don’t want to sell – you need to sell.

This automatically puts you at a disadvantage. You don’t have the time or freedom to choose the right moment to sell, and you most likely need to sell the home to cover the cost of the new place. This is a lot of pressure to deal with.

There is a way to avoid getting stuck in this situation, but it involves a slight change in mindset. You have to think of your home as an asset, not a belonging.

You have to be ready to sell and move on when the time is right, not just when it’s unavoidable.

What do investors do?

Let’s imagine we’re property investors. We see homes as assets, equity, and so on. We see gains, losses, opportunities and slow periods. But what we don’t do is decide to sell based on personal circumstances.

We sell based on one thing and one thing only: the market.

This is the ‘want’ part of the ‘want vs. need’ idea. Or as this article is titled, it’s the part where you can objectively decide when you’d be better off selling.

So here are some elements that might contribute towards a scenario in which you’d be better off selling.

1. It’s a seller’s market

When it’s a seller’s market, it means there’s more demand than supply, i.e. there are more buyers than homes available for sale.

Right now throughout Queensland, and especially in Brisbane it’s a seller’s market. There are an estimated 20,000 more buyers than available homes, which is what’s driving house prices up, up, up.

2. Interest rates are low

Low interest rates mean friendlier borrowing rates, which in turn drive purchasing.

If you have low interest rates on your side, not only will there be more buyers considering a purchase, but you’ll also have more favourable borrowing options for your own purchase when the time comes.

Right now, as you might already know, interest rates are at a 30-year low. That’s good news if you’re thinking about selling, as it means buyers are going to be more inclined to borrow.

3. You want accessible cash

Cashing out on your property can open a lot of doors for further investments and lifestyle options.

If your home has been appreciating in value for decades, you aren’t going to see any of that profit until you get a valuation and put it on the market (or at least refinance).

Imagine your home has gone from $300k to $500k over the years. This would mean you have an extra $200k to invest elsewhere – but you won’t be able to access these funds unless you’re willing to put your home up for sale.

But remember – you’ll have to pay numerous fees and charges if you do choose to sell, so look for a decent financial advisor to help you understand the process and costs involved.

What goal do you want to achieve?

When all’s said and done, the idea of choosing (rather than needing) to sell is all about using your home as an asset: something you can leverage off.

If you want to start investing in other properties and generate some passive income, or if the kids have moved out and you want to downsize, it’s worth contacting a valuer and financial advisor to see where you stand.

For example, if your family home is worth $700k but you don’t need all the space anymore, you could: a) sell it and buy something smaller, and invest the remaining money in another smaller property or into your super; b) sell it and buy something smaller but worth the same amount; or c) refinance and put the funds towards a new investment.

The most important thing to do is to seek expert advice to see what you options are (that is, if you’ve considered selling but are still on the fence). You might be pleasantly surprised at what you can achieve.

And remember, if you’re choosing to sell of your own accord, you have the power. You and your agent can pick the exact time to list the house, and you can take your time sprucing it up and looking for a new place.

If you’ve entertained the thought of selling but haven’t taken it any further, take a moment to consider what might be possible. And it goes without saying, the Hicks Real Estate team will be more than happy to talk you through your options at your own speed.