Are you ready to sell your home?

October 15, 2014

When you’ve raised your children in a home and sent them off into their own lives, you can really develop an attachment to the place where it all happened.The same goes if you’ve invested your blood, sweat and tears in renovating a fixer-upper. Are you ready to sell your home? Your head says “yes,” but your heart says “no”; which should you listen to, emotion or reason?

Are you ready to sell your home?

The question game

First and foremost, there are a few questions that can guide your thinking.

  1. What are your motivations? Is there a shortage or surplus of space, inside or outside the home? Has your financial situation changed for the better or worse because of a job loss, illness, promotion or inheritance? Have you found a new job elsewhere? Do you want to move closer to certain services, perhaps near a good school for your children? Do you want to change your lifestyle by moving to the city or country?
  2. Do you need to move right away, or is it a longer-term project?
  3. What would you look for in a new property that your current home doesn’t have? Would some renovations meet those same needs?
  4. What is the current housing market like? Is it a seller's market, with many buyers on the hunt, or a buyer's market, with lots of for-sale signs but few prospects?
  5. What is the market value of your property, compared to others in your neighbourhood?
  6. What are the current interest rates?
  7. What is your borrowing capacity? How much of your monthly budget are you willing to spend on your mortgage?
  8. Do you have any expensive projects in the works, such as taking a trip, paying for your children's education or starting a business?

Should you buy or sell first?

You have made your decision: you are ready to sell your home. But there is one last important question to consider before you do it. Is it better to buy your next home as soon as you see the one you want, or should you hold off until you sell your current house? The answer depends largely on the real estate market, your financial situation and your risk tolerance.

  • Sell first. Your budget is tight but you can be ready to take quick possession of a new home. These conditions can give strength and credibility to your offers. If you have not yet found your next home when you have to leave your own, you can make do by storing your belongings in a storage unit and renting an apartment, staying with relatives or renting a hotel suite.
  • Buy first. The advantage here is that you won’t find yourself in the street if your old house doesn’t sell quickly. You’ll get a head start on the move and can pack, change your address and have the services connected in the new home. But if it takes a while to sell your old property, you will be stuck paying two mortgages, two tax bills and two home insurance policies. If this is still the most desirable option for you, set aside a contingency budget for overlapping costs.

Sometimes you can make an offer that is conditional on the sale of your old home. A conditional offer may not be accepted if there are other buyers interested in the same house. Good luck with your house hunting!

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