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  • Writer's pictureTeam Pinto

Are You Ready to Sell Your Waterloo Region Home? How to Make the Right Decision for You

So many factors go into deciding if you’re ready to sell your Waterloo Region home. Will local market trends make the sale worthwhile? Are you ready to part with your home and all the memories you’ve made there? To help you determine if it’s time to sell, take a look through these ways to help you decide if now is the right time (for you) to start the homeselling process.

Thinking of selling your Waterloo Region home? Ask yourself these questions

Do You Have Enough Equity in Your Home?

The difference between your home's market value (how much you could sell it for) and your mortgage balance is your equity (how much you owe on it). The majority of homeowners have some positive equity in their homes as a result of rising home values in recent years.

However, if you purchased a home at a high price and the market in your area has declined, you may have negative equity, which means your home is worth less than what you owe. It's also referred to as "being underwater."

How do I figure out how much equity I have in my house?

Let's say you think your house is worth $250,000. If your mortgage balance is $200,000, you have $50,000 in equity in your home. You can get a more accurate estimate of your home's current estimated value by hiring an experienced local real estate agent to provide an expert appraisal.

Bottom line: Equity allows you to successfully pay off your existing mortgage and apply what’s left over toward a down payment on a new home and moving expenses. If you have enough equity, you may be in a good place to sell.

What is Your Non Mortgage Debt Load?

If selling your home means getting a new one, and getting a new home means getting a new mortgage, you'll want to consider your other debts, such as car payments, credit card minimum payments, child support, and student loan debt. To determine if you'll be approved for a new loan, lenders will look at your entire financial situation and use a debt-to-income ratio.

Debt to Income Ratio Explained

Your debt-to-income ratio, abbreviated as DTI, is a figure used by mortgage lenders to determine how much house you can afford. They'll add up all of your monthly debt and compare it to your gross monthly income to get an overall picture of your financial situation.

Whatever type of loan you apply for, all lenders have a maximum debt-to-income ratio, which means they don't want you to spend more than a certain percentage of your monthly income on debt repayment (including your new mortgage payment).

Bottom line: You may be ready to sell if your debt-to-income ratio is less than 43% (an industry average that varies by lender and loan type, so check with your lender).

Can You Make the Required Downpayment on a New Waterloo Region Home?

The standard down payment is 20%, but there are loan options that require as little as 3% of the purchase price. According to current statistics, 52 percent of repeat home buyers in Canada put down 20% or more. In hot seller's markets, you'll probably need to make your offer more competitive by putting down more than 20% or having extra cash on hand to cover a low appraisal.

Bottom line: If you have money set aside for a new down payment, you're in a good position to begin looking for a new home before selling your current one. If you don't, you'll have to sell your first home before you can put a down payment on a new one.

Can You Meet the Moving Costs?

The cost of moving is an often-overlooked expense when selling a Waterloo Region home. Whether you're moving across town or across the country, you'll need money to cover costs such as temporary storage, truck rentals, moving services, and packing supplies. Before you decide to relocate, learn more about moving costs in the area you are planning to move to.

Bottom line: If you have enough money to cover moving expenses (and a down payment), it's a sign you're ready to sell.

Do You Have the Cash to Make Small Home Improvements?

Many sellers complete a few home improvement projects before listing their home in order to get the most money out of the sale. They choose the improvements that will give them the best return on their investment.

Depending on the condition of your home, home improvements can cost anywhere from a few hundred dollars for a quick interior paint job to thousands of dollars for major upgrades. If it will cost a significant amount of money to get your home ready to sell, make sure to account for it when making your decision.

Bottom line: If you have the funds to make any necessary home improvements before listing your home, you're probably ready to get serious about selling it.

Are You Ready for Negativity?

Tailoring your home to what buyers want is an important part of the home selling process. Sellers frequently receive feedback on their home from potential buyers, and it isn't always positive. It's possible that the decor choices you like aren't to everyone's taste, or that the one thing you like about your home is the first thing they'd want to change. Buyer feedback can be difficult to hear, but in order to close a deal, you'll need to be emotionally prepared to hear the opinions objectively.

Bottom line: If you can keep yourself from taking negative feedback about your home's condition and style personally, you're emotionally prepared to sell it.

Do You Need More - or Less - Space?

People have different housing needs at different stages of their lives. Marriages, divorces, new babies, grown children leaving the nest, retirement, and old age can all prompt homeowners to consider selling their home.

Bottom line: Major life events are good indicators of an appropriate time to sell, whether you need more space or have more space than you care to maintain.

Are You in a Seller's Market?

Inventory is low in a seller's market, and homes sell quickly, often with multiple offers. In a buyer's market, listings can sit for a long time before finding the right buyer. Pay attention to local news, conduct your own research, or consult a local real estate agent. It's possible that you'd prefer to take advantage of a seller's market.

Bottom line: Putting all other considerations aside, everyone wants to walk away from a home sale with a profit that is significant enough to justify the effort. If the market is hot, you might find that now is the best time to sell your Waterloo Region home.

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