Not long ago I met a young couple who had bought their home just 12 months earlier; and now needed to sell it due to a change in their circumstances.
This put them in a difficult situation when they least needed it, largely because it can be very difficult to sell a home so soon after it has been bought.
Here’s the advice I’d recommend in this situation.
Selling a home within 12 months of buying it is a risky and costly venture. The main reason is because the home hasn’t had time to appreciate in value. Even in the best-case scenario, it can take a few years to recoup the transaction costs involved (e.g stamp duty, agent fees, conveyancing costs)
Unfortunately, in this case our young couple had also spent a significant amount on improvements since buying the home. This put them in an even more difficult position.
To add insult to injury, buyers who did their homework and looked up the purchase history discovered that it had only been bought a year ago. This made them assume it was a fire sale, which always makes negotiations interesting.
With these issues in mind, my advice in this situation comes down to two choices:
- Meet the current market and sell
- Look at other options, like refinancing or renting
Neither of these two options are particularly attractive if you absolutely have to sell, but if you have no choice, you have no choice.
Time is, in a nutshell, the biggest factor in play. You absolutely want to give the home the opportunity to appreciate. Renting will buy you time, while helping contribute to loan repayments. But if you have no choice but to sell, even renting it out isn’t particularly appealing.
Where possible, it’s important to try to buy yourself as much time as possible. If this means rethinking your exit plan or considering the rental route, then give these options a chance.
This is of course a case-by-case thing – the recommendations above are only to be taken as general advice. If you’re considering selling within a year or two of buying, please consult a financial professional to properly discuss your options.
If you’ve been advised to sell, you can contact Madeleine Hicks Real Estate on 07 3355 6845 for a valuation or to list your property.