It depends on one thing.
With real estate activities reopening after Covid19 lockdowns, many of our clients are asking this question.
The standard answer from most real estate salespeople is going to be: “YES – it’s a great time to sell”. Because of course, for agents, it’s always an excellent time for you to sell. So it’s kind of like asking my dog Ruby (a Labrador) if I should give her more food?
However, at Restate, we’re different. We are not salespeople. Over five years ago, we committed to restating real estate as a professional service. Meaning we shifted our focus to be true consultants. Trusted advisors. In other words, focussing on advising and serving in our clients best interests – even if that means you don’t sell now.
In truth, regardless of Covid19; the economic situation; market conditions, or anything else going on in the world – the answer to this question is and will always remain the same:
It depends on your circumstances.
Your circumstances should be the main focus in deciding whether to sell – in any market.
Neil Jenman recently wrote about this very topic. Although there’s plenty of Neils commentary I disagree with, in this case, I think he’s hit the nail on the head:
“If selling your home will improve your life now, sell now. If not, do not sell now.
There are two aspects of circumstances: Your personal situation and the situation in your area.
For example, if you have found another home (after selling your current home), you may need money from your current home to buy your new home. So, yes, in such circumstances, if your finances fit, selling now is right for your circumstances.
But what if prices have dropped in your area?
Or what if prices may drop – as predicted by gloom-and-doom merchants who, like frogs after rain, are now making deafening noises.
If prices have dropped and you are buying in the same (or similar) area, the price of the home you buy should have dropped too.
Given that most people go up in price when they re-buy, a falling market may be ideal for them.
To use a simple example: If you are selling and prices have fallen ten per cent from, say, one million dollars to $900,000, you’ll feel like you’re “losing” $100,000. So, to prevent this “hundred-thousand-dollar loss”, you withdraw from sale.
Nothing has really changed. Except you feel better because you vow to sell when your home’s value goes back up to $1 million. You just ignore the price drop of your home…
This is what thousands of home-owners are doing now. Waiting for “things to improve”. Which means the only “boom” now is a boom in properties withdrawn by frightened home-owners.
Fear is the world’s number one reason for missed opportunities.
Yet, look what can happen if sellers focus on personal circumstances instead of economic circumstances.
While you may “lose” as a seller in a falling market, you can “win” as a buyer.
If you are buying a home that was worth two million dollars, it may have fallen ten percent which means you now “gain” two hundred thousand dollars.
You “lost” $100,000 when you sold, and you “won” $200,000 when you bought.
Clearly, the answer to the question: “Should I sell now?” can be yes and no. It depends on the circumstances of the person asking the question.
What if you are not going to buy again, should you still sell during COVID-19?
Well, it depends what you do with the proceeds from the sale of your home. If you have a good financial adviser and you are advised to invest in, say, blue-chip shares based on the maxim of “buy in gloom; sell in boom” that may be good for you.
Just make safety and good advice your focus. If we took as much notice of safety in our financial health as we are taking with our physical health in this pandemic, there would be more financially healthy people.
Some owners are not selling because they are spooked that prices will fall. The doomsayers yell: “Property prices may fall 20 to 50 per cent!”.
But, if this is true, surely, we should all sell now – asap?
What if it is not true?
What if prices do not fall?
Or, if prices do fall, what if it’s mild – and short-term?
Do you sell then?
Or, maybe the opposite happens – and prices rise.
See how confusing it is to predict prices? Then stop trying to do what you cannot do and, instead, focus on what you can do, what’s best for you based on your personal circumstances.
A great investing book is ‘The Zurich Axioms’ by Max Gunther who writes: “Distrust anyone who claims to know the future, however dimly.”
The mathematician Sir Isaac Newton (1643–1727) was one of the most influential people of all time. Yet he infamously lost £20,000 (apx $5m Australian dollars now) investing. A chagrined Newton said: “I can calculate the motion of heavenly bodies, but not the madness of people.” So true.
If Sir Isaac could not predict prices, how can you – or anyone?
It really ‘does your head-in’ making or hearing predictions based on unknown factors. The greatest stress in our lives comes from situations beyond our control.
If you thought of selling your home in the past, it may be time to do so again.
Sensibly, your most important question is: How will selling my property now affect my personal circumstances?
If it will improve your circumstances, sell. If not, don’t sell. That’s it.“
There you go — solid advice from Neil.
While we’re happy to discuss your personal situation, along with the pro’s and cons of selling now, ultimately only you can decide what is best for you.
However, once that decision is made, and if the answer is “yes – your life will improve by selling now”…
Then your focus needs to shift onto how to ensure you maximise your net sale proceeds.
How can you achieve the highest possible sale price – with the lowest selling costs?
That is what we are here to help you do. It’s what we pride ourselves in doing better than any other agent in New Zealand: Leaving you with more in your pocket than you would have had without us.
You can discover more about how here. Or simply give us a call to set up a confidential consultation. There is zero cost involved and no obligation (on either of us) for you to become a client. It’s just an opportunity for us to discuss your needs and discover if we are the best fit to help you. If not, no harm. At least you’ll be more aware of your options and what you can do to end up with more in your pocket.
Alternatively, if you’re the type of person who likes to invest in gaining the knowledge to help yourself – check out our Home Sellers Seminar. Even if you sell privately or decide to engage a traditional agent, it will help you.