by Kevin Lapp
on Wednesday, July 1st, 2015 at 2:29pm.
When its time to make a big change, life may offer a subtle sign, like a spouses note on your pillow that reads, I never want to see you again. But how do you know when to nail that For Sale sign in the front yard of your real estate?
As life-changing decisions go, selling your home is right up there. Whether its to take a promotion, care for aging parents or something more personal, only you can say if its the right move for you. But if the choice to sell real estate has been made and the only thing left to decide is the timing, a few pointed questions should tell you if that time is now.
Can We Afford it?
It sounds like an obvious question. Yet given that Canadian household total credit-market debt mortgages, consumer credit and non-mortgage loans rose to 162.6 per cent of disposable income last year (how is that even possible?), its not. Maybe you got in over your head with your first home, but now that youre slightly older and much wiser, take a close look at your finances before making a move with new real estate:
Is all of your non-mortgage debt paid off?
Do you have an emergency fund with 3-6 months of expenses put aside?
Has your home recovered enough value to give you at least 20% equity for your purchase? This will enable you to make a 20% down payment on your next home, saving you thousands of dollars in mortgage insurance costs. If you dont know the answer, ask an experienced realtor for a free comparative market analysis that will indicate the approximate market value of your real estate.
If you answered yes to all three, you may be ready to take the plunge in selling real estate. If youre not sure what an emergency fund is, you still have work to do.
Are We Still Emotionally Attached to our Current Home?
Do you tear up when you see the notches in the wall where you measured your childs growth, or do you just think they must have an app for that now?
On the other hand, you may have recently experienced a divorce or other loss that necessitates a fresh start.
Usually the reality is somewhere between those two extremes. Whereas the question about finances was directed at the head, this one is clearly for the heart. If youre quiet for a moment, it will tell you what to do. You just have to listen.
Remember, an expert realtor can offer a wealth of advice on the sale of your real estate. If youre not ready to take it, however, youre not ready to sell.
Does our Home Still Fit our Lifestyle?
In most cases, moving out is more than just moving over. Its moving up or down. If you have a new addition or one on the way, it might be time for another bedroom or two to keep the happy in one big happy family. Conversely, when the kids (finally) leave the nest, downsizing can mean less upkeep and more time to enjoy the peace and quiet. After all, youve earned it.
With so much at stake and so many factors to weigh, the decision to sell your real estate is rarely a simple one. Nevertheless, taking stock of your finances, emotions and lifestyle can go a long way to giving you clarity. And if you should get that nasty note on your pillow, look on the bright side. Your moving decision just got a whole lot easier.