When it comes to getting the absolute best value for your home, timing is everything. You need to consider several factors when determining the best timing to sell, including: your needs, market demand, seasonal factors and competition levels.
Your Needs
Your own needs play a very strong factor in what your home sells for. When you need to sell, you leave yourself little room for negotiation, and are prone to taking a lower offer—because you're desperate and therefore have to. People who need to sell, often due to relocation or divorce, are more likely to "compromise" and cut into profit margins to make it work.
When you don't need to sell, you won't be motivated to part with your property unless someone meets or exceeds your expectations. This puts you in a power position and lets you hold out for what you want. Even if your home never sells, you're no worse off, and can enjoy another year building equity. In a perfect sellers world, people would only sell their homes when they don't need to.
Market Demand
Market demand follows the same principles as general supply and demand: the rarer a resource, the more people are willing to pay for it. If there are more buyers than properties, those buyers will need to pay more money to beat out their competition—therefore allowing your home to sell at a higher price. However, if there are more properties than buyers, then the need to outbid will dwindle and houses will generally sell for less.
Hot $$$ Tip: Sell your home when inventory levels are low and buyer demand is high! This can lead to multiple offers and bidding wars if you price your property right.
Seasonal Factors
The time of year can also play a role in selling real estate, and seasons can have a direct impact on people's motivation to make big transitions. As a general rule, most people don't want to move in the fall or winter, because the weather is cold, the kids are in school, and holidays take a chunk out of financial budgets. Consequently, most people want to buy in the spring or summer; going back to the concept of market demand, you want to sell when buyers want to buy.
Hot $$$ Tip: If you sell your home during the popular months, try to extend your possession date into fall when there are fewer buyers and more motivated sellers!
Competition Levels
You share more than a fence with your neighbour—you also share real estate values! It's typical for homes within the same neighbourhood to be similar in size, shape and location, which means they're also similar in price. If your neighbour lists their home at a lower price than yours, they're going to get the buzz from buyers. Would you rather pay $350k or $340k for a home? Even worse, you might drive extra traffic to only your neighbour's listing; people will think they've scored a great deal at the neighbour's and may never actually check out your place. Pricing your home competitively can make or break your sale.
Hot $$$ Tip: List your home when competition is low. Buyers will have fewer options and be willing to pay more for your property.
Should I Sell Or Buy My Home First?
This question is classic and it has a very simple answer: sell first! You never want to get into a situation where you own two homes at once. Therefore, as a buyer, you would need a clause in your contract that allows you to get out of the deal if your own home doesn't sell. It makes your offer less attractive, and you could lose the deal on that alone.
If you do manage to negotiate that clause, it will come at a price. A smart seller will ask for a higher offer in exchange for their "generosity". But worse, you'll start to feel desperate to sell your own home. You'll suddenly need to sell, and fast, which gives the negotiating power to potential buyers. They'll be more likely to lowball you, and you'll be more likely to accept.
On the other hand, selling first gives you the upper hand. You won't have to sell immediately, and you also won't have to buy either. Once you receive a good price for your home, you can begin your own hunt, with fewer clauses and much stronger negotiating power.
Hot $$$ Tip: Talk to your bank about bridge financing if you do find yourself in a position where you own two homes. Sometimes buying first is actually a smart strategy, particularly when inventory levels are exceptionally low.
