When's the Best Time to Sell Your Home? 3 Things to Help You Know When to Sell
How do you know when the timing is right to put your home on the market? This is a loaded question and is definitely one of the most commonly asked questions of all time when it comes to real estate. The answer is really a simple one. There could be a buyer looking for your home during any season of the year so the best time to sell is really any time—sometimes people make the mistake of waiting for the "right time" and then aren't able to recognize it when it arrives.
While there is no hard and fast rule as to the timing of selling your home, here are a few things you can consider to help you decide whether the timing couldn't be better right now or whether you should be waiting a bit to add your home to the listings.
Real Estate Market Conditions
There are always going to be various cycles happening in the real estate world, especially here in Calgary. With so much growth happening in the city, it can be difficult to find the right wave to jump on. Even when the current market conditions suggest either a seller's or a buyer's market, you can be sure that there are homes out there in great locations that are reasonably priced and showing well.
That said, the principle of supply and demand still plays a large role in the real estate industry. When there are more properties for sale than there are buyers (too much supply and not enough demand), then prices will decrease until the demand equals the supply and the market levels out. Conversely, if there are more buyers than homes (limited supply and high demand) then prices will rise until the demand begins to fall and level off.
Timing is a critical factor in determining the amount of money you can expect to get for your home. It is important to note that we are discussing a free, “no labour required” way to add thousands to the price of your home. Before figuring out when we should sell, we need to understand the two primary factors that will determine how effectively you can maximize your return in regards to timing: motivation and competition.
This concept is very simple to understand. When your motivation to sell is high, you will be willing to accept a lower price in order to close a transaction more quickly. However, when your motivation is low, people will have to pay a premium to buy because you “don’t have to sell." For example, if you are about to be foreclosed on by a bank, then you will likely take less for your home just to get yourself out of the debt.
A buyer who does their homework will look at all the similar homes in a neighbourhood and choose the home that best fits their needs and provides the most value for their dollar. If you have two similar homes, one is $360,000 and one is $370,000...which one would you buy (all else being the same)? The competition in your neighbourhood will dictate how much you can reasonably ask for your home.
If there are lots of homes similar to your own, then you will have to price your home competitively to ensure that it sells in a reasonable amount of time. If possible, wait until your home is one of the only ones like it on the market. If a buyer doesn’t have any options, they will have to pay your price to own your home.
Interest rates are one of the most important factors when buying a home. If rates are low, people are more likely to jump into the market. In general, it's difficult to predict when rates will rise or fall, so it's important to pay attention to the numbers and general state of the economy.
Time of the Year
Who wants to move or be in transition during Christmas? Would you like to haul furniture when it's snowing? Well, not many people like moving or buying during fall and winter. Conversely, when spring arrives, everyone thinks it is time to make a change in their living arrangements. Also, people with kids need to be settled before September 1 for the start of school.
So what does this all mean? There are a lot more buyers on the market in the spring and early summer. You want to sell when people are buying and buy when people are selling. If you want to sell quickly, the spring and early summer are by far the best times to have your home on the market, though selling in the fall or winter are also fine options if they work better for you.
Spring is always a great time to list your home. There are a lot of eager buyers who have been waiting for the winter months to pass in order to start their home shopping in the spring. If you're looking to buy as well, you can take advantage of the increased motivation of sellers when the buying activity decreases to get a lower price. Sell your home in the spring, and ask for a very long possession date into the late summer or fall. However, if you shoot for the moon on your price, you will find your home among the thousands of over-priced listings that go stale in the fall as the buyers disappear.
There are other things to consider, however, when selling your home at different times of the year. For example, if you have children, selling your home during the summer months when they are at home enjoying the summer holidays can be more difficult. But the great thing about showing your home in the summertime is you can show off your garden if you happen to have a green thumb and can discuss summer-related amenities such as living close to a swimming pool, tennis court or even a lake.
Despite the comments earlier about selling in winter, there can be benefits. There are usually fewer people looking for a home in the winter, but you'll find that viewers are often more likely to be serious buyers. The most motivated sellers and buyers are usually actively searching the market in the winter, which may work to your advantage.
Selling in the winter does come with some disadvantages since it's hard to keep up with the salt, snow and mud that will be getting tracked through your home. You also won't be able to show off your lovely landscaping at this time of year. Your beautiful leafy tree in the front yard will be sitting empty and barren during the cold months. The best way to handle this is to provide some green pictures to your real estate agent of the house and how it appears in the summertime.
Should You Sell First or Buy First?
Can you financially support selling and buying a new residence? There are quite a few different costs involved in selling the home you currently have and then buying a new one. You'll want to consider all the costs of selling and if you don't have a good idea of what all these costs are you should contact a real estate agent for more information. There is a standard rule, common throughout the real estate, that says you should sell first and for good reason.
Here’s a scenario: You find a home that you would like to purchase, and you write the contract subject to selling your home in the next 30 days. The seller doesn’t like accepting this special clause in the offer, but agrees to it if you pay $5,000 more. For the peace of mind of not being stuck with two homes, you agree. Now you are selling, however, you are two weeks into the listing and starting to get nervous.
Finally, a lowball offer comes in and you negotiate price, but settle for less than you wanted because you really want the other house and have to sell your current home to pay for it. On both sides of the transaction, you may have lost a total of $15,000 ($5,000 on the buying end and $10,000 on the selling end).
If you sell your home first, you will always be in a power position, as you don’t "have to" sell. This way, you can wait as long as you need for an offer that is acceptable to you. In addition, when you decide to buy you can write an offer with fewer conditions, and have the ability to match possession dates for your convenience.
In normal marketplaces, selling first will give you the edge in negotiations to save thousands. But if you are looking for an uncommon home or if the market is very low on listings, you may want to consider buying first. Give yourself enough time on the possession date to sell your home without too much pressure. In addition, speak with your bank about bridge financing in case you need to carry two mortgages temporarily.
So, When Should You Sell Your Home?
No matter what time of year it is, it may be the perfect time to sell a home as long as it is priced right. There are disadvantages and advantages to selling at any time of the year. Knowing how to handle these pros and cons and making them work for you can lead to a faster and easier sale.