10 signs now is the time to sell

When is the right time to sell? This is a question we are asked every day. It isn’t a one size fits all answer as everyone’s situation is different. However, here are 10 indicators to help you assess whether now is the right time for you to sell up and move onto greener pastures.

Low cash rate

The current cash rate of 1.50 per cent has resulted in favourable conditions for buyers (and therefore sellers). The Reserve Bank of Australia has maintained this cash rate since August 2016. Interest rates have a massive impact on the property market as it is the cash flow trigger for affordability and determines both supply and demand.

With home loan repayments easier to manage, the property market has been made more enticing for buyers, not to mention the omnipresent fact that the advantageous rates won’t last forever!

Weak Aussie dollar and share market

A low Australian dollar is beneficial to those who are selling property, as it makes it more affordable for overseas investors. The Australian dollar, at the time of writing is, $0.77, a significant drop from its high of $A1.10 in 2011.

Recent global economic and political events, has seen volatile movements for Australia’s share market. In February 2018, $60 billion was wiped off the Australian share market. Not only does this make property more appealing to Australian’s and international investors, but the added competition between buyers will likely push up the price tag.

Do you need the money?

This is an obvious but important point. In most cases your property will be your most valuable asset. Consider whether selling your property would enable you to be smarter with your money. Perhaps it will help you upgrade, free up some money to enjoy other parts of your life, enable you to put money into a business or investment, or perhaps you are finding it hard to service the loan and want to remove your debt burden. Whatever the reason you need to understand your finances as this can be a big motivator to sell or not. Of course discuss your individual financial situation with your accountant or financial advisor before making any decisions.

Your neighborhood has seen a massive price rise

Have you been lucky enough to live in a suburb that has seen a price hike – certainly many parts of Australia have seen this. Whilst this makes it hard for first home buyers, if you own your own home it might be the right time to sell, to benefit from the real estate boom that much of Australia has enjoyed over the last few years and buy something that better suits your needs. We buy houses in Cedar Rapids

Perhaps you can afford that upgrade now, or want to free up some money to travel or move closer to lifestyle activites you enjoy? To asses this you need to understand what’s happening in your area. Your local LJ Hooker agent lives and breathes real estate and can provide you with a Local Market Report – a deep dive into the sales, trends and market fluctuations in your neighbourhood.

Your family is expanding

If you’ve added a few kids and perhaps a pet into your home upgrading your home is a natural step. You might find you need more space or perhaps want to move to an area that has better lifestyle offerings such as parks, family friendly neighbourhood or access to good schools and amenities. Even if you don’t have kids buying a home near a good school is great for re-sale.

The kids have left the nest

The other end of the story – is that the kids have moved out of home and you no longer need the space – oh and wouldn’t it be nice to free up some money so you can travel and do other things with your time rather than cleaning the large family home.

The Neighborhood isn’t for you anymore

Does your current neighbourhood suit your lifestyle? If you are an active outdoors type – can you access the great outdoors near your home? Do you love the cafe, eating lifestyle but are miles away from anywhere decent so have to travel for ages to indulge your passion? Figuring out what you want in a neighbourhood is a good step forward and an easy way to assess whether your current suburb ticks the boxes. Here is a guide to help you find the best neighbourhood for your needs

Hating the office commute

Are you tired of the long commute to work each day – perhaps moving closer to where you work could be an option? It will free up those hours spent in traffic or public transport – just think how much more time you’d spend doing the things you like!

Contemplating Renovating

If you are looking to renovate your home it is important that you consider whether your renovation is adding value or whether in the long run it will lose you money. As a home owner when it comes time to sell your focus will be on ensuring you make the most amount of money from the sale, but if you have spent too much on the renovation you may have overcapitalized. You need to determine what you want to achieve from your renovation, how much it is going to cost, what value it will add to your property and if it would be cheaper to buy a different home rather than renovate.

A fresh start sounds fabulous!

We’re often told the Australian dream is owning your own house, with two and a half kids and a picket fence. But times change, and with it, so do our dreams. Nowadays, lots of people prefer to own an apartment, or a more compact house close to the city. You don’t have to subscribe to what you’re told is the right type of property, because one size doesn’t fit all!

Steps to getting a home loan

When it comes to getting a home loan, the process can seem daunting – especially if this is your first application.

However, by being aware of the home loan application process – and the documents and information you may be asked to provide along the way – you can ensure everything goes as smoothly as possible.

Do your research

The first thing you’ll want to do is research the different types of home loans available as understanding the different options will help ensure you are making an informed decision.

Understand the loan conditions, penalties or exit fees?

You’ll also want to set yourself a budget, or perhaps talk to your home loans specialist about this, so you can determine the amount of money you need to borrow. Getting pre-approved for this amount could be a wise idea if you are still shopping around for the perfect property. Pre-approvals tend to last for up to three months and can help you move more quickly once you have found the perfect property.

If you are finding some of the terminology confusing, our Home Loan Glossary will help you understand the jargon.

Home loan documentation

During this application process, you’ll be asked for several pieces of documentation. This includes showing that you have enough savings to cover the deposit on your property and other fees that may be applicable.

If you are self-employed, you may be asked to show tax returns and other financial information from the past two years, while anyone who is employed will need to show evidence of their payslips.

Group certificates and 100 points of ID may also be requested.

Getting Approval

Lenders take into account four main considerations or criteria when assessing your home loan application. Firstly your capacity to repay the loan based on your income and expenses. Secondly, if you are considered a good financial risk, so they will check your credit rating to see that you have a history of repaying your debts. The third consideration is collateral, which ensures the property you are buying is adequate security for the money you wish to borrow to pay for it. Finally, they look at your capital, which are any assets you currently own.

Getting your application approved is the next step to owning your own home. Common practice is to obtain a ‘pre-approval certificate’ prior to buying a property. This will help your property search and keep your budget in check. This certificate confirms that a financial institution will lend you ‘x’ amount of money when you find a property to buy. Be careful though, one of the standard conditions is ‘subject to valuation’. If you pay too much for a property, your lender will see this as a risk and may not provide the cash. Not a good position to be in when you’ve already exchanged contracts!

With stricter lending criteria in the wake of the Global Financial Crisis, it may also be necessary to show a genuine history of your ability to save money. In some instances, particularly for first home buyers, a guarantor may also be required or a larger deposit (at least 20 percent of the purchase price).

Buying a property

Depending on whether you are planning to buy at auction or make an offer on a property, you’ll find there are some slight differences in the transaction process.

If you are buying at auction, you will usually be required to pay a ten per cent deposit at the moment the hammer falls – and there is no cooling off period. Your deposit is then held in trust by the agent or your solicitor and any interest earned is split between you and the vendor during the settlement process.

Buying from an offer usually involves a non-refundable payment of 0.25 per cent as a holding deposit if it is accepted.

From this point, you will usually be entitled to a five-day cooling off period, at which time you should organise your inspections and valuations, as well as discuss your finances with your lender.

During this period, it is essential to be aware that the property will not be held exclusively for you until a deposit of between five and ten per cent has been paid and contracts are signed.

Processing your home loan

After you have found the home you love and bought it you are up to the final state in the home loan journey, the processing of the home loan. To help ensure this runs as smoothly as possible it is important that your lender remains informed throughout the buying process as they will be able to process your home loan more quickly if they are aware of all the details.

This information includes the contact details of your solicitor or conveyancer, real estate agent and vendor, as well as a copy of the contract of sale. At this point, first-time buyers should complete their forms for the First Home Owners Grant – these can be supplied by your home loan provider or through your solicitor or conveyancer.

Once a valuation has been carried out and all the other documents have been received and processed, your home loan provider will grant formal approval on your home loan and the documents will be sent to you.

At this time, you will need to sign these documents and return them. Your solicitor or conveyancer will then liaise with your home loan provider until the loan settles – this usually occurs between 30 and 42 days after the contract has been signed, depending on its terms.

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