Are you thinking about selling your home before the end of the year? If so, it’s essential to understand the market, which has shifted significantly since its peak in the winter. Earlier in the year, listing your house meant an almost guaranteed sale at well over your listing price as buyers competed over record low inventory.
Now, a series of interest rate hikes seems to have stopped the buying frenzy in its tracks.
As a result, homes are taking longer to sell as many first-time buyers have dropped out of the market. More listings are available, allowing buyers to shop around.
A common mistake many sellers are making is trying to work with how the market was, not what it is now. However, you must acknowledge that the market has changed if you want to enjoy a successful sale.
Realistic expectations will help you price your home effectively and attract the attention of buyers. Overpricing will only help sell the competition as your home sits on the market.
However, the news isn’t all bad for sellers. Homeowners often forget that even though your house may not sell for as much, you won’t have to pay as much for your new home.
Great News For Upsizers
If your goal is to move up to a bigger home, the timing is actually better than before. While prices have softened throughout the GTA, luxury homes have taken a significantly bigger hit. The pool of buyers is always smaller for more expensive houses, and it has shrunk even more.
Selling now means less of a difference between the price of your existing home and your new home.
Best of all, more inventory is available, allowing you to take your time to find the home that’s just right for you. However, getting your timing right is critical as the market continues to shift.
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Should You Sell Your Home Or Buy A New One First?
Whether to sell or buy first is an age-old debate in the real estate market. You must weigh the pros and cons and decide the best course of action based on your resources. It’s a question that doesn’t typically have an easy answer. However, it has been a long time since we’ve seen anything resembling “typical.”
The last two years have been frantic and so strongly slanted in favour of sellers that buying a home became a near-impossible feat. If you sold first, there was no guarantee you would be able to secure a new place before your closing date. Many sellers had to stay with relatives or rent as they searched for available listings.
In the meantime, prices were rising so fast that the home you wanted could quickly become unaffordable, even after selling your existing house for top dollar.
During that market, buying first was almost always better. Unfortunately, buying first can also be risky. It can be hard to qualify for financing, and you have to be able to handle two mortgages until you can sell your current home. To top it all off, you’re shopping blind because you don’t know how much you will get from your sale.
During more stable markets, buying first does have some benefits. Find out more here.
Benefits Of Selling First Now
As the market shifts, it becomes more advantageous to sell your existing home first.
- Financially, this is the safer option as you will not have to carry two mortgages.
- It will be easier to budget for your new home. You will know exactly how much you can afford to spend after your existing house closes.
- You will have more negotiating power. Your house is sold, which means you can remove the condition of financing from your offers.
- Housing prices are still falling. There will be a smaller difference between the value of your current house and the home you are upgrading to.
- Now that there are more listings available, you no longer have to worry about not being able to secure your new home.
Upsizers aren’t the only ones who can benefit from the changing market. It’s also a great time for downsizers.
The Cons Of Selling First In This Market
- Interest rates are likely to increase again, which decreases your buying power if you need a mortgage to purchase your new home. You can mitigate this risk by getting a pre-approval to lock in your rate now.
- Housing prices are unpredictable. All signs show that we are heading into a more balanced market. At this point, we expect that prices will decrease further as the market corrects itself. However, as with most things in life, there are no guarantees.
Before making any decisions, we recommend sitting down with a financial advisor to analyze your resources and create a realistic budget.
Are you ready to start searching for your new home? Our featured listings page is a great place to start.
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