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Thinking of potentially selling your home? If so, it’s important to consider life circumstances as well as your financial situation to determine whether you are able to afford a new home, and all the costs of selling your current home.
When considering whether you should sell your home, it’s important to ask yourself these 6 questions.
First things first, it’s important to know how much your home is worth. You can find this out from a real estate agent, or a property valuer. They will compare recently sold homes within your neighbourhood to get a better idea of a price range home buyers would be willing to pay for your home.
Selling a home, and buying a new one isn’t an easy feat. You’ll want to ensure you have enough equity in your home to pay off your mortgage, the costs of selling, as well as the costs of moving.
Home equity is the percentage of your home that you truly own. Most people borrow money when buying a home, which means they slowly build equity as they repay the loan with interest. It’s important to understand how much equity you have in your home to determine if you are able to sell your home. Once you’ve figured out how much of your home you own, you’ll be able to estimate if your equity will cover the costs of selling.
The cost of selling a home can vary. The National Bank states that about 3-4% is common for agent commission fees. You’ll also have to take into account extra costs such as repair costs, closing costs, and staging and housing overlap costs. Talk to a real estate agent to get a better idea of their costs and take note of all other potential expenses to get an estimate on the full cost of selling your home.
Selling a home can be a complicated process, so to determine whether you should sell, you should consider the home selling timeline and how it will impact your life. If the sale takes longer than expected, it can have a negative financial impact. It may force you to incur other expenses such as storage fees, temporary housing, and maintenance of the home.
It’s difficult to determine exactly how long it will take to sell your home, however it is normally dictated by factors such as how ‘in demand’ your neighbourhood is, the number of homes for sale, and seasonality of the market. You’ll want to talk to your real estate agent to help you determine how long it may take to sell.
When selling a home, you aren’t required to make repairs, however, you will need to price your home based on the costs needed for repairs. It’s important to keep in mind that most home buyers prefer buying a home that is ready to go, so you may need to think about whether it’ll work out better to simply repair before you sell.
Sometimes, it can be tempting to undergo a large renovation project to improve your home before selling, but it’s crucial to keep your return on investment in mind. Anything you put into your home, you’ll want to be able to recoup when selling.
There are a few different ways to sell your home, however there are two main ways in NZ. That is either through a private sale where you as the home owner are in control of the whole process, or through a real estate agent. In this case the agent will be the one who organises advertising, promotion and open home days, and will deal with potential buyers’ offers. There are advantages and disadvantages to both strategies. We encourage you to take a look at Westpac’s list of pros and cons of each method to help you decide how you want to sell your home.
If you’ve decided to sell your home, and are now looking for a new place to live – check out The Summit Homes house & land packages. Get in touch with us to learn more!