Knowing when to sell your home is an important element that can potentially add thousands of dollars to the sale price of your home. There are two main factors that we can use to determine the ideal time to sell your home -- Supply/Demand and Motivation. We'll cover each one in depth below.
Supply and Demand
In the real world, there are few unshakeable laws or hard facts, but the principles behind supply and demand are certainly prime examples.
The ebb and flow of supply and demand will have a profound effect on your home's price in the market. If there are more properties than buyers (high supply, low demand), this will cause prices to go down until the level of demand reaches that of supply, leveling out the market. Alternately, with more buyers than available homes (low supply, high demand), this will force prices to go up until the demand levels off. In a nutshell, this is the main governing factor in the real estate market, and business in general.
This is a very simple idea but an essential factor when it comes to settling on a price. Essentially, it is your level of desire to sell your home. With high motivation, you are eager to close the sale and will likely take a lower offer in the interests of a quick sale. With low motivation, you don't feel a lot of pressure to sell and are more likely to wait for a higher offer.
With an understanding of the basic theory behind the market, we can now discuss the best time to sell a home.
What Else Is For Sale?
The number of homes similar to yours will have a large impact on the price that you can reasonably list your home for. An informed homebuyer will have looked throughout your neighbourhood for all the homes that have what they are looking for and at the price they want to pay. It's clear that the homebuyer will go for the lower price between two similar houses, all other aspects being equal. You have to make sure to price your home competitively if there are a number of similar homes in the area, that's if you want it sold in a reasonable timeframe that is.
TIP - Without a number of options to choose from, a homebuyer will have to buy your home if it has what they are looking for. If you can, wait to sell your home so that the market isn't saturated with similar choices.
When's The Best Time to Sell?
It helps to view things from the human perspective; the market is governed by and influenced by people after all. To get the best price, it's essential to sell when most people are buying, and buy when the most people are selling. When would you want to move? What factors in people's lives impact when they decide to move? Not too people are very keen to move when there is snow on the ground, or if it's raining. As for families, most of them need to be settled in a new home before September 1st, so they can be sure to get kids to school. The most popular time to move, and as it follows to buy or sell a home, is without a doubt in the spring and the early summertime. It's a lot easier to convince people to help you move with the prospect of a cold beer on a sunny day afterward.
As this is when the majority of people move, it is bar none the best time to look to sell your home. But with that limited time window in mind, it's essential to price your house well. Go too high and you risk allowing your sale to cool with the impending autumn.
TIP - Take full advantage of your knowledge of human nature. Shoot for a long possession date as far into the summer or fall as you can, when you sell your home. Then when it comes to buying a new home, you can take advantage of those motivated sellers in the early autumn.
Should I Sell First, Or Buy First?
It's generally recommended that you sell first with the main reasoning being your motivation level going into the sale. Imagine this: You find an outstanding home that meets all your needs. You agree to purchase the home but include a clause that the sale is subject to you selling your home within the following 30 days. Now, the seller is not a huge fan of this clause but goes for it regardless, due mainly to the extra money you paid in order to include this piece of mind. Now, what is your state of mind going to be like when you go to sell your own home? With a 30 day deadline to secure the home you want, you are now a motivated seller. You are now more likely to accept a lower offer on your home so that the deal will close on time. When you factor in the amount of money you forked out in order to include the 30 day seller's clause as well as the lower sale price for your own home, you are likely out several thousand dollars more than you would have been otherwise.
Conversely, if you were to sell your current home first, you would be in a much more favourable position. You are no longer the motivated seller. Now in a much more solid position, you will be able to wait out the market and settle on a much more favourable price. Furthermore, when you are ready to go ahead with the purchase of a new home you are less likely to include unnecessary clauses and really simplify the whole process, making it much more convenient for everyone.
Please contact Justin Havre at RE/MAX First for advice on selling your home in Calgary, Alberta.