Should I Sell My Home

Before deciding to post a For Sale sign in the front garden, there are a few things to consider.

Essentially there will be two parts to your equation. Weighing up the emotional reasons for selling and considering the financial risks such as including costs to repurchase, future mortgage repayments and selling and moving costs including the real estate agents selling commission, is there any tax implications ?

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1. Weighing up the emotional reasons for selling.

It might be wise to think carefully about exactly why you have chosen this time to sell.

Would you be better off waiting? For example, if you are retiring you may be thinking about moving to the coast or somewhere warm have you checked out the area you intend to move to?

Is there enough to do? Is the cost of living better or worse there? Empty nesters might be wondering if a smaller home would be easier to maintain, but will they miss the home they raised their family in, too much? A career move promise financial security, but how secure is the new job?

The following is a list of likely reasons for selling and a few tips for better decision making:

A Growing Family

• Find out how close your new home will be to public transport, schools and/or shops
• Will the move put you closer or further away from grandparents or people you rely on?

The Career Move

• Are there alternative employment opportunities in the new area?
• Is it handy to public transport?
• If you rely on the internet, will you be able to access broadband?

Renovating & selling for profit

• Is the dwelling structurally sound? (i.e. footings, mites, rot)
• Are there limiting council restrictions regarding renovation in the area?
• What is the likely profit margin? (check the average market price of improved homes in your area)

Retirement or ‘Empty Nest’:

• If you look after grandchildren, will there be enough space for them?
• Are you ready to give up the comfort and familiarity of your home and your neighbourhood?
• Would renting out your home while you travel be a suitable alternative?
• Consider that retirement villages and apartment blocks have certain rules & regulations (incl noise restictions - so use of power tools would be limited, which may curb your hobbies) Will you be happy to live by those?

2. Calculating the financial risks

Once you have thought carefully about where you will live once you’ve sold your home  as well as the best way to invest the proceeds of the sale, now is the time to make sure you get the most out of the sale.

In order to make sure you get the maximum price without paying maximum penalties and fees you need to think about things like:

Tax Issues

The good news is, if you are selling the home you currently live in your ‘personal residential property’ you won’t have to pay Capital Gains Tax (CGT) because a ‘home’ is exempt from this kind of tax.

However, you will have to pay Capital Gains Tax if you sell an investment property, and it sells for more than you paid for it and you can't claim exemptions.

Capital Gains Tax is usually calculated using the same rate as your income tax  and is only charged on the amount of money your property increased by.

For example, if you bought another house for $100,000 and later you sold the house for $150,000, you would pay Capital Gains Tax on the $50,000.

(For further information try the Australian Tax Office site or see your accountant or financial advisor).

A Buyer’s Market: not all bad news

Do you know if it is a ‘buyers market’ or a ‘sellers market’ right now?

To be sure, you can ask your local estate agent and keep your eye on the real estate guides. Essentially, whether we are experiencing a buyer’s or a seller’s market comes down to supply and demand.

In a buyer’s market there are more properties for sale than there are people willing to buy, and this can bring prices down because when there are many properties for sale in one area, the owners of those properties need to compete against each other to sell their homes.

There’s a good chance that some sellers will decide to lower their price in order to sell sooner. Others will decide to invest in making repairs.

But what does it mean if you are selling your home?

Obviously, a sellers market is what you would be hoping for. Although, one good thing about selling your home in a ‘buyers market’ is that if it is an attractive buy, you have every chance of selling it quickly.

A ‘buyer’s market’ tends to get everyone pretty excited and eager buyers tend to make decisions about their purchase a little quicker because they know if they hesitate they may lose a great opportunity.

For ideas on how to get the best value from selling your home, see Sell My Home Tips