Is Now the Right Time to Put Your House on the Market?
With the property market and economy looking precarious, you may be wondering if now is the right time to sell your home
There are several factors that can assist you in this decision and this guide outlines when the best time is to sell and why now might be an opportune time.
Let’s look at this more closely.
When is a Good Time to Sell?
The truth is, there may never a great time to sell if your goal is capital appreciation. For example, if you sold a property in 2021 when the property prices were increasing, you might think you sold at the right time. But in a few years’ time, if property prices recover and continue to rise, you may find in hindsight it was not the best time.
The generally accepted advice is it is a good time to sell when you are either ready to move property or divest yourself of the property.
The property market tends to move in synchronicity. If you find you are selling at less than you expected, you should also be able to buy a new home at less than you expect.
When your property value rises, the whole market tends to rise simultaneously. Whereas, when your property price falls, it tends to be because of a wider market fall.
How To Know if it is the Right Time for You to Sell?
The only exception to the above, is if you are not looking to buy another property. In which case you should weigh up your options and decide whether you should sell now or retain ownership of the property (and all the costs that involves).
Currently, the market is expected to level off or decline, which means most property values may either stay the same or fall over the coming year in most areas of the U.K.
Most leading market analysts are predicting a fall of around 6% for most property values. But no one has a crystal ball and we are likely to see many twists and turns over 2023.
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Should I Put My House on the Market Before Looking for a New House?
If you are passively looking for property, such as perusing property websites to see what type of property is available it might not be a good idea to put your house on the market. This is because you may find yourself in the position of giving a buyer for your property false hope of purchasing it if you are unable to find a suitable property in the short-term. This will frustrate prospective buyers and estate agents that are trying to assist you with the sale.
If you are more committed to finding a new property and are arranging viewings and putting in offers on new properties, it is best to have your property on the market. This is because your property will need a buyer before your own purchase can complete. If you arrange a mortgage offer for your new purchase and then subsequently put your current property on the market, this will significantly delay completion.
In 2022, 1 in 3 property sales fell through which is substantially higher than it was in previous years. With this in mind you should have your property on the market as soon as possible in order to attract enough interest that if a property sale does fall through, you have other bidders available.
Should I Sell My House Now or Rent it Out?
Selling a house or renting it out are options if you own the house outright or if you have a Buy to Let mortgage.
Residential mortgage lenders stipulate you must be residing in the property, you will be breaking your mortgage contract if you opt to move out and rent the house without consent from the lender.
Some mortgage lenders allow you to have lodgers, providing you are still resident at the property.
If you want to move out and rent the property you will need to switch from a residential mortgage to a Buy to Let mortgage. To do so you will also need to have enough equity in the property to cover the deposit on a Buy to Let mortgage or additional funds to put down on the new mortgage.
A typical residential mortgage deposit is at least 5%. Whereas for a Buy to Let mortgage you will need to put at least 20% of the property value down as a deposit. In most cases, especially now with lenders’ strict rental stress tests, a minimum deposit of 25% is typically expected in the Buy to Let market.
Of course, if you own the property outright you have none of the restrictions mentioned above by mortgage lenders.
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How to Prepare for a House Sale?
There are several areas to consider when preparing for a house sale.
Primarily you will want to ensure the property looks as appealing as possible. That means doing the deep clean you might have been putting off.
You should also approach a few estate agents and get valuations from each. It is not just about property price with an estate agent, look out for the following:
- The commission/fee they charge
- Their track record selling properties in your area
- Whether they take care of viewings or if you will need to be more hands
If commissions are high or you want to sell your house as cheaply as possible, there are a number of agencies that provide a basic framework for selling the property on your own for a smaller fee.
As mentioned, house sales can fall through and when they do it can cost a fortune.
Homebuyer’s insurance is an inexpensive way of covering for this eventuality and will help you recoup the costs associated with a failed house purchase.
As a seller you will need to provide your estate agent with a TA6 form for freehold properties or a TA7 form for leasehold properties.
This form is a legal requirement, and you will need to ensure all answers are accurate. Some of the sections may need additional research to complete.
If you fail to disclose something on a TA form, you could be liable for a range of costs to the new buyer – including compensation. Buyers may also pull out of the house sale and leave you with those costs.
Speak to a Specialist for Mortgage Advice
Finally, it is important that you make any decision to move home with a sound understanding of your finances and the options available to you.
As a whole-of-market mortgage broker we can help you make the right decision. Our advice is completely free and we will guide you throughout the whole process. Book your free consultation today and discover the options for selling or renting your property today.