It may seem silly but this is often one of the first questions you need to ask if you are considering selling in the current market.
We aren’t referring to just the cost of marketing and agent’s commission, but also the outstanding balance of your loan if applicable.
If you had bought at the high and you need to sell now, chances are that you may be in a negative equity position or if you have multiple properties cross securitised, you may need to put in either cash or equity or a combination of both at settlement of one property (check with your bank or broker to discuss your person financial situation).
In simple terms, if your loan is close to or the same value or even more than the saleable value of the home, your bank may not be able to release the mortgage at settlement. This can lead to a possible breach of contract if you are unprepared and you may need to refinance or take out a personal loan to cover the residual debt.
Adding to this there may be tax planning considerations you need to discuss so that you can offset any potential gains with loses in the same financial year. If you decide to lease the property out instead, there could be an opportunity to benefit from tax minimisation strategies available. Your accountant is the best person to speak to in this regard.
Ultimately, if you don’t need to sell in the current market, it is best to stay out if you have the financial and mental capacity to do so (because owning property can be emotionally draining at times when the market goes through a correction phase). So before signing the dotted line on the agency appointment form to list your property for sale, please due a few checks with your bank/broker, accountant and legal advisor for specific advice for your own personal situation.
For more information regarding the potential sale of your home, contact Locations Estate Agents 49722484 or visit www.locationsestateagents.com.au