Timing Your Real Estate Sale for Maximum Profit

Timing Your House Sale

Timing Your House Sale

While a home might not be a traditional nest egg, you still rely on its equity as a significant component of your financial health – as it bumps your net worth, makes lines of credit more accessible, and offers potential drawdown cash flow in retirement.

Therefore, if you sell that home, it’s in your best interest to maximize the profit. This is the same general principle as when you sell anything – an old coffee maker on Facebook Marketplace, a used car, etc. Only this time, timing really matters.

Real estate’s unicorn years might be behind it (for now), but you can still time your real estate sale to squeeze as much profit as possible from the property. In this article, let’s review why timing matters in real estate and explore how to use time to your advantage.

Why Timing Matters?: The Effects of Market Cycles, Interest Rates and Economic Indicators

Several outside factors exert influence on the price of a home. Unlike that coffee maker example in the intro, which more or less depreciates in and of itself, real estate is pulled in both directions by factors beyond itself.

You could fill an encyclopedia with the myriad “invisible hands” impacting the real estate market, but here, let’s narrow it to three critical influences: market cycles, interest rates, and economic indicators.

Market cycles refer to the unforeseeable ebb and flow of supply and demand, which dictates whether you’re in a seller’s market (advantageous) or a buyer’s market (disadvantageous). Interest rates, meanwhile, influence demand by making it easy or challenging for buyers to obtain financing. And economic indicators like the unemployment rate necessarily reflect the overall health of the real estate market.

When the stars align – high employment, low interest rates, high demand, low supply – you can sell your home for a lot. Therefore, determining when the “iron is hot” for striking is essential.

How to Time Your Sale for Maximum Profit?

That leaves one question unanswered: how, exactly, do you time your sale to maximize profit? Assuming you can’t wait years for the market to reach another unicorn year, you have to read the proverbial tea leaves. You must research trends, track indicators and partner with knowledgeable people.

Here are a few ways to nail the timing of a home sale:

  • Partner with an Experienced Realtor: Find the highest quality realtor in your area. For instance, if you’re selling in Toronto, research the best real estate company in Toronto. Top agencies understand market influences and know when and how to price your home for a lucrative sale. You can follow the points below, but partnering with a quality realtor will always be the best way to ensure a timely, profitable sale.
  • Follow the Local Market: You should be able to access market conditions indicators that track the status of your local market. Type in your location (i.e., Toronto) along with “real estate market trends” to see monthly, quarterly and annual sales price changes. This will tell you where things are at now so you can extrapolate on the future.
  • Pay Attention to Broad Economic Trends: Pay attention to national economic health, employment, and global affairs to better understand the big picture. Discuss these broad economic trends with your realtor to determine whether waiting or listing is advantageous.
  • Track Interest Rates: You can wait forever for interest rates to reach barrel-bottom again. Instead, track likely changes to interest rates to determine if and when they might see a nominal drop. Even a slight decrease in interest rates can spell success for a home seller.

Again, the best way to time your home sale for maximum profit is to partner with a trustworthy, experienced realtor with their finger on the market pulse. Then, it’s a matter of doing as much research as possible and crossing your fingers in hopes that your timing pays off.

About Sashi 553 Articles
Sashi Singh is content contributor and editor at IP. She has an amazing experience in content marketing from last many years. Read her contribution and leave comment.

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