The amount of people who find themselves in personal debt is rising. Tougher financial times have meant that in order to clear personal debt people will need to sell their assets. A home is usually an asset with the most amount of money involved, so for those people using equity is sometimes the only way forward. As property experts, Norwich Home Buyers understand this. So in our latest article we have put together a guide to selling your home to clear personal debt.
Should You Sell Your Home?
Being in debt can sometimes make you make quick decisions which may not be the best. However, thinking whether selling your home is the best option should be your first thought. Selling your home to release equity does not work for everyone, and is only a viable option if your home is worth more than what you owe. If not, then you have negative equity so you will not make anything from a sale.
To figure out how much you owe subtract your remaining mortgage balance from what you expect your property to make within the current market. This will give you a rough idea of what profit you should expect to make. As mentioned, if you find yourself in a position where your home is in negative equity then selling is not going to be viable.
As well as selling your home you need to consider other financial elements that may also affect how much your home is to achieve in the property market. These include some of the following:-
How Long Will It Take To Sell?
If you find yourself in a financial situation which requires immediate attention then selling your home quickly may be required. However, not all markets are able to work at such a quick pace, so you may need to consider some other options if you are not able to sell as quickly as you would like to.
How Much Will It Cost To Sell Your Home?
Unfortunately it is not as easy as just selling your home and collecting the equity that you have in your property. There are fees such as estate agency commission, solicitation fees, conveyance fees and even repairs that may be required before you can sell. All of which eat into the equity which you may stand to make from selling your home.
How Important Is It For You To Stay On The Property Ladder?
For most, their home is the biggest investment which they have made within their lifetime, so if you are to sell, are you able to get back on the property ladder? Will the equity in which you make from your home sale allow to clear debt and then add to a deposit for a new home. This is crucial, as once your house has sold there is no going back.
What Is The Best Way To Sell Your Home?
So you have taken an indepth look at all of the points above and have decided that you are in a position to sell your home. Now deciding what is going to be the best way is definitely your next consideration. Most will have two main options in which they can choose from. This will be either an estate agency or auction. Both have benefits as we will highlight below. Taking time to consider both options is definitely advised.
An estate agent is still by far the best option when it comes to selling your home. They can utilise their network and various marketing tools in which you attract people who may be interested in purchasing. By using an estate agent they will also give you a guide to what homes are selling for in your area so you can have a better understanding on how the financials may sit once you enter into that process.
An auction may not be for everyone but it is a popular way to sell your home if you are just looking for some quick cash. Mostly aimed at those without a mortgage most homes sell well below their market value, however as mentioned it is good for those looking for a faster sale. There are numerous local auctions you can take advantage of, so ensure that you pick the right one. Also, prior to an auction make sure you understand the fees and costs that are involved.
Could Downsizing Be An Option?
Downsizing is a very popular option at this current time with more and more people adopting it. Yes, this does still involve selling your home, however at the same time it means that you are able to stay on the property market. As well as reduce your monthly outgoings as naturally a smaller home costs less money in which to run. Looking at this as an option should also be a consideration. It may also mean you can stay in the same areas as well.
Being in a tough financial situation is always difficult, and deciding what is best to do is always going to be hard. However selling your home to clear personal debt may also be the only way in which you can go. Ensure that you have done all the necessary research first and have understood the costings behind a house move. At Norwich Home Buyers we are property experts within the Norwich area. If you would like some advice on selling your home, or even are looking to sell then please Contact Us.