Top Reasons for Selling a Property
A whopping 88% of home sellers who choose to enlist the help of a real estate agent to sell their property achieve on an average 22% more money than home sellers who have decided to sell their property themselves. * Source: 2014 Profile of Home Buyers & Sellers. National Association of Realtors (USA).
If as a property seller you have accepted that you need the help of a professional real estate agent then your next challenge is to find the right agent for your type of property. To ensure that you choose the right real estate agent for your purposes we have come up with a selection process based on our experience that will take you through the process and help you select the right agent who will end up putting the most money in your pocket when your property is sold.
There are probably many real estate agents in your area – many of whom are capable of doing a good job. The real challenge though is to find a real estate agent who is the best fit for you. So first lets assess your situation. We have all heard stories of people who say that they would be a millionaire many times over if they had never sold the first property they brought! In a utopian world we would all be savvy real estate investors and own a diverse portfolio of investment properties that earn us a nice profit every year while at the same time growing in capital appreciation. But the fact is that in the real world our circumstances in life dictate when, how and why we buy and sell our properties.
Most people generally buy a property because they need a roof over their heads. Most have graduated to being property owners from being tenants because they felt it was time to move up from paying rent to owning their own house. They will buy the most affordable property that fits their needs and budgets at the time. They try to pay the home loan as soon as possible. In earlier days, most people would make do with that first home for the rest of their lives. In fact once they moved in, it wasn’t unusual to never move house in their lifetime at all. Once they purchased property they would simply stay put. Their kids grew up there and spent their growing years in the same area. It was convenient and the family became part of the community where they knew many other people and grew accustomed to the sights, sounds and small businesses and shops in the area. Why would they want to go through the entire trouble of moving?
These days though and especially so after the world has been through the Covid 19 pandemic, families in cities are more likely to pack up and move. The average family in a city like Mumbai may move as often as seven to ten years. Our circumstances change. For example for a younger couple with young kids there may be an offer of a better paying job in another part of the city or country, or more children are coming along and the family has outgrown the 2 bed apartment or the family feels that they are no longer in the right area for the reputed international school that they would like their kids to attend. The reasons for moving are many and varied. And sometimes there is no pressing reason at all. Some people want to simply move into a more upscale neighbourhood or a second home on the outskirts of the city or would like a change of scenery. In our hybrid workplace world that has gained prominence in the post-Covid scenario we are much more likely to sit down and reassess our current housing scenario.
Reasons for Selling Property
From our experience in assisting sellers in selling their property over the years, we have found that the top reasons that people sell a property are as follows:
- More Space
You need a bigger house. When you moved into the current house you occupy it was just you and a few basic pieces of furniture. Now you are collecting stuff left, right and center and the kids need more room for studying etc. A second living area and a study cum office room is becoming a must-have these days for most families.
- Less Space
Or maybe you need a smaller house. The kids have grown up and moved out / gotten married and you and your spouse now find this big old house too big to live in and maintain. The maintenance is expensive and you have trouble keeping up with repairs etc. And especially in our dusty cities, the idea of having less space to clean and maintain is very appealing.
- Neighbourly Problems
Neighbourhood has changed. You’ve had great neighbours until last year or a few years back. And you have seen the neighbourhood transform. New people have moved in and the demographics have changed. And the new neighbourhood does not appeal to you so much as how it was before. It has lost its charm and has become too busy and too noisy.
- Moving for Work
You have had a great job offer. You are tempted to take the offer because it’s a better job but the office you have to report to is two hours away from your current house. The daily commute will just get too taxing from your current home. You have no other choice but to move.
- Looking for Lifestyle
You and your spouse desire a lifestyle change. The current suburb you stay in is getting more and more expensive to stay in with more noise and air pollution. So you have decided to make a “sea” change or “tree” change which means either shifting to a nice beach side town like Alibaug or head to the mountain resort towns like Panchgani. Ultimately with the change you want your family to have more time together in a better environment.
- Time for a Change
You have been staying in this location for too long. You have decided that it is now time for a change and there are lots of new homes in new areas that didn’t even exist until a few years ago. You would like to explore these new areas.
- Better Schools
You want to be near a particular school. You want to move to a residence near the reputed school so that your kids have a chance to go to a better school with less time spent traveling and more study time. Home prices which are in close proximity to good schools are generally on the higher side. But you don’t mind the high prices and the move because it is all part of your grand plan.
- Too Many Steps
When you purchased this current house the terrain or layout of the house wasn’t a problem (e.g. house built on a steep hillside driveway like Pali Hill or Malabar Hill in Mumbai or a villa or duplex apartment with stairways). You were younger then and had stronger knees! But these days these issues are getting harder to manage and your health isn’t getting any better. A smaller apartment with same level access outside and throughout the interiors of the house now makes a lot of sense.
- Relationship Breakup
You have had a change of circumstances in your personal life. You are getting divorced and neither of you can buy the other person’s shares in the property out. Or neither of you want to stay in the same house anymore. You simply have to sell the house and move on.
- Following your Dreams
You are now ready to buy your dream home. This could be because of a sudden infusion of cash in your life. You are not getting any younger and it means that the beachfront home in South Mumbai that you were dreaming about for a long time is now within your reach. And that means you will have to sell this current house.
- Looking for a New Project
You just love renovating homes. Now that you have finished doing up your current home you know that you can sell this to a buyer for a decent profit. And after that you can look for another opportunity to buy a new home and add value to it and at the same time make another handsome profit for yourself.
- Death in the Family
Your parents have left you this house in their will but the house doesn’t suit your lifestyle anymore and its also not the area you envisage living in anymore. Or maybe there are disagreements with your siblings and other relatives about the value of the property and you just want to sell your shares in this property and take your share of the sale income and live in peace elsewhere.
These are just some of the reasons why someone may want to sell their property including putting retirement plans into action, releasing equity that has accumulated over the years so that you can go and enjoy it in your twilight years. The important thing is that as a seller you have thought through the decision and made up your mind. Every reason that I have listed above is a valid reason for selling and moving. So as a seller you need to relax and be confident about your decision!
If as a seller you are serious about moving then you need to make a decision and stick with it. The question to ask yourself is this: Are you staying or are you selling? You need to start marketing the property to attract the one person who will pay more than anyone else to buy your house. If you have decided to sell then your motivation is set to set the plan of selling in motion. If you haven’t decided then you have no motivation or plan.
Now let us look next at your motivation for selling since your motivation will affect your choice of which real estate agent you appoint to sell your property.
Your Property Goals
Your motivation to sell your home affects your property goal and will also determine the final sale price that you want for your home. It is very important at this point to have a clear idea of your property goals and how you will set out to achieve them. Your property goals are only yours. You are the only one who can decide the best outcome for yourself and for your family. You may be focussed on getting a specific value for your house because that’s the amount you will need to move towards your future desired life. Which is why at this point you must do some research and work with the best real estate agent who can get you your desired asking price for your home. Apart from finding you the right buyer for your house and the right price, the right agent can also help you with:
- Settlement Period
Do you want to sell your property and be in your new home by the next school holidays so that the kids can start their new school year in the new home? This can be a few months out and away and you need not be in a great rush to find buyers. A long settlement period can be one of your property goals.
- Short Sales and Marketing Time
On the other hand it may be a case of “quicker the better”. In which case even if a buyer is ready to pay full cash and wants to move in next week you and your family would have no problem with that.
Your property goals also include your lifestyle goals and not just your financial ones so do not let a specific figure be your main goal. Consider the bigger picture of your life so that you have the motivation to move in the right direction.
It is not the seller who decides the final selling price of a property. It is the buyer influenced by a great real estate agent who offers the most price.
Your Message to Buyers
The reason you have for selling your house is a private decision and its your own business. Buyers do not need to know your personal situation before buying your house. In fact the less they know about your situation the better it is for you. The more they know the stronger their position in bargaining becomes.
Buyers should not know that you lost your job or your business is facing tough times and that you can no longer afford the upkeep of the house and keep up with mortgage payments. If buyers know this then they are more likely to make a lower offer thinking you need to sell quick at a distressed rate.
More importantly buyers should not know that there is distress in your house which is causing you to sell the property. Remember it is a very small percentage of buyers who are interested in buying “distressed” properties in India. Buyers are superstitious and they feel that if the current owner of a property is distressed then that same misfortune can fall upon them if they buy and move into the same house. There is never a good reason to label a property as “distressed sale” because it doesn’t give buyers the right message.
Remember to sit with your agent and to control the message that you will be sending out to potential buyers for your property. Buyers are always looking for a reason to pay less. So always play your cards close to your chest and make sure that your real estate agent does too. You do not want to give any reason to buyers to not pay a premium price for your property. If buyers suspect that you would like to sell quickly because of problems then they will use this information to leverage a better price for themselves.
Sell First and Buying Later
This is a really a million dollar question. When you are considering your own situation you need to decide whether its more prudent to sell your home first and then buy a new property or whether to buy a new property and then sell later.
The obvious and clear advantage of selling before you buy is that you know how much money you have got from the sale and it can help you start the search for your next property with a clear budget in mind.
Being all cashed up and ready to buy when you find exactly the right property is a strong position to be in especially if you have negotiated an extended settlement or closing date which allows you to stay in the house while you are looking for the next one. The biggest advantage is that you will not need any bridging finance when you find your new home.
Buying First and Selling Later
Some property owners prefer to buy first before selling their current house. The thought of having to move into a rental property perhaps in a new area while they still look for another property is not a very pleasant idea to them. There is also the risk that property prices rise while they are still searching and they will priced out of the market if they delay the purchase. If your finances are solid and you can afford to finance the cost of holding two homes even if for a short while then you should go for it. This move will enable you to buy your dream new home when you see it and not be rushed to sell your current home just so that you have the finances for the next one. Provided that you sell in a timely manner you will be well placed to enjoy your new home while your agent tries to sell the previous one. Although with this decision you may have to accept a lower price if time is not on your side and you realise that you have to sell within a certain period of time.
Can you Buy and Sell at the Same Time?
This would be the best scenario in an ideal world. It is not a rare scenario and its referred to as simultaneous settlement or “closing”. If you can time the sale of your property and your next purchase in such a way that you only have to move once you will have the advantage of knowing how much to spend on your new home and thus have the best of both worlds.
Again your choice of the real estate agent can be a real asset in this scenario. Agents who have strong local knowledge will be able to guide you in making the best decisions about whether to buy or sell first. They can warn you if the market is rising and not to delay your next purchase and they will have the experience to explain all the options that you have currently.
Conclusion:
As a property seller you are embarking on a journey but you do not have a roadmap yet and so the path ahead of you is not clear. That is where your real estate agent steps in and provides the map that allows you to travel with them on a safe and prosperous journey. When you are ready the journey can begin!
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