5 Signs It's Time To Sell
While many property owners have little motivation to sell in a depressed market, personal circumstances can sometimes mean being forced to make hard decisions.
As Sydney and Melbourne property markets come off the boil by an average of nearly 10% and tightening credit conditions continue to leave many otherwise enthusiastic buyers scrambling to meet the ever-mounting requirements of banks to get a loan, you could be left wondering how much further house prices could fall.
While many property owners have little motivation to sell in a depressed market, personal circumstances can sometimes mean being forced to make hard decisions – that is, selling in a market where your property has fallen in value. Or worse yet, having to accept a price below what you actually paid for it.
Nevertheless, here are some circumstances where you may find it’s better to take the sting now and accept the loss rather than hold on.
1. You’ve over-committed financially
If you’ve purchased using Interest-Only and you’re now moving to Principal and Interest the repayments can be significantly higher and this can put undue pressure on your financial situation.
Whether it’s a forced restructure of your loans or you simply went too hard too fast when times were good, it may be worth relieving yourself of some debt and getting some breathing space back into your life. Nothing is worth the pressure that financial stress can put on you or your family. Finally, sell your property intelligently.
2. You want to completely exit the market
This is more common if you’re looking into retirement. At this stage of life, cash is king. No one wants to be left lugging a massive mortgage into their twilight years when you have no income to fund your debt.
By the time you come to retirement you should be relatively debt-free, so if you’re still carrying a huge loan, then now could be the time to get rid of it. The timing of the sale can be imperative to a good result though, so make sure you’re consulting your financial planner and accountant on the sale and how your exit should be structured.
3. The grass is greener elsewhere
If you’re moving out of your own property into a market where prices have fallen dramatically, remember your own turf may not be as much as it once was either, so make sure you’re not left at a disadvantage.
Trading one investment for another can also be a wise move if you feel the returns will be better elsewhere, but only if you’ve taken into account all of the costs of “getting in” and “getting out”.
Remember, you’ll be up for selling costs such as conveyancing fees and agents fees if you’re selling, as well as Capital Gains Tax if it’s an investment.
If you’re moving into another deal, then Stamp Duty and Mortgage Insurance will definitely put a dent in your bottom line as well so be sure to factor in all these costs. You may find that it doesn’t make sense financially after it’s all said and done.
4. It’s a dog – or a lemon!
If you bought into an investment some time ago and have been holding onto it in the hope it will start performing, it could be time to cut your losses, especially if the surrounding markets have made significant gains and yours has remained stagnant.
A property that is costing you money with excessive maintenance, bad tenants or low rent isn’t worth your time mentally or financially. Selling up now, cutting your losses and investing in something that’s more productive could be the start of something great.
Be sure to give this some thought beforehand though and don’t act impulsively. As mentioned earlier, the exit and re-entry costs of property ownership can be high.
5. There’s an offer you can’t refuse
While very few sellers are breaking street records for the sale of their property these days, properties that tick all the boxes will often attract a strong level of interest and getting top dollar in today’s market could mean that you’re stretching your dollar a lot further in a suburb that has seen some dramatic discounting.
If someone has offered you a price for your property that exceeds expectations, then it may be time to sell up and take the win. However, bear in mind that sometimes things can be too good to be true, so make sure you consult a trusted real estate expert before planning all the overseas holidays you’re going to take with your new fortune and secure the deal before making plans to move on.
So if you’re looking to sell in this current market, make sure you’re taking into account all the mental, emotional and financial implications that will come with that sale. Property is typically a long-term relationship forged through consideration and patience.