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3 Tips for Seller's 'Stay Or Go?' Dilemma

Written by on Monday, 12 May 2014 12:36 pm
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Although the focus is on selling price during negotiations, sellers know that how they use their real estate, and all that represents, present and future, is the true measure of value. It's this accumulated value, not just how much money they'll get, that sellers should concentrate on when tackling the "Should we stay, or should we go?" dilemma.

Real estate professionals understand that selling price matters to sellers, but these professionals are also aware of the many factors and details that add up to the seller's experience-driven, pride-of-ownership value. How aware are you of what you genuinely value about your current home or recreational property? What market value do local, experienced real estate professionals believe exists and why? Weighing these two value perspectives can be a challenge for sellers, because this analysis is usually outside their experience. Nor is the difference between ownership value and market value all that is involved in 'stay or go' decisions.

Lack of experience or uneasiness with the unknown should not dissuade you from the mental adventure of weighing your options. Don't shy away from a thorough, creative comparison of all that can be gained by staying and all that this would cost versusall that can be gained by going and all that would cost. Have fun talking to friends and exploring the internet to discover other people's successes and experiments. Here's 3 tips to get you started on your real estate adventure:

1. Don't just compare possible selling price to potential purchase price.

When deciding whether this is the real estate market to jump into, many sellers concentrate on the possible selling price of their current real estate and the potential purchase price of the next property. These dollar figures get the most attention, but they are not all that buying and selling real estate involves. Yes, selling and purchasing prices matter, but it's your TOTAL NET GAIN from the combined sell-and-buy real estate transactions that really counts:

TOTAL NET GAIN = NET GAIN from Sale + NET GAIN from next Purchase

Your real estate professional can help you estimate how much will end up in or out of your pocket after mortgages and a long list of fees (including theirs) for both the sale of your current real estate and the purchase of your next property. Add to the "sale cost" list any long-standing service contracts for which you'll lose price benefits when you move, and any accumulated benefits like-lower-than-neighbours realty tax, earned by consistently disputing tax increases. Moving, legal, and renovation costs must be included in the equation, too. Broad strokes will get you started, so you can assess net benefits and net losses in every aspect of life and homeownership. Often this exercise reveals clear "stay" benefits or disadvantages that make deciding easier.

2. Don't let financial promise distract you from assessing the true value ownership represents to you.

Before setting goals and scribbling down a "what comes next" action plan, assess the true value of ownership of your current real estate and all it connects you to, not just its financial value. One measure of what your home means to your life and family is whether you want to move out of the neighbourhood or just to a new location within it. If you don't want a dramatic location change, list what you value about the neighbourhood. Will these items persist, or is social or economic change putting those value elements at risk? While you assess what's keeping you here, consider these connections with open eyes not just nostalgia for what was. Moving to a new location brings change on many levels. How will the new neighbourhood enrich life and what will be sacrificed?

3. Don't overlook how 'staying' could involve significant change.

Just because you are not handy and have never undertaken a renovation before does not mean you can't or that you won't be great at it. If there is a strong pattern of extensive renovation and new builds in the neighbourhood, take a close look at what these options, or a less ambitious refreshing of your property would give you and at what cost. If this pattern is common in your area, moving to a new location in the same neighbourhood may represent a lateral financial move or even require additional expenditure. Then, your choice may be to renovate your current property or move to a less expensive area. Also, check with your municipal office to see if secondary suites or duplexing would be an option for your property. Adding an income-generating suite will also give you choice in the future.

For example, you could live in the suite and spend time travelling on the rental income from the rest of your home. Tied to these considerations are modernizations and upgrades that are necessary, or will be, since 15 to 20 years is the average life of most residential systems. If you project ahead 5 or so years, what overhauls will be necessary? If a new furnace, roof, windows…are on the horizon, a renovation now may make sense. This may allow upgrades like solar panels, heat pumps, and energy-efficient windows which can also improve building efficiency, increase comfort, and reduce maintenance and costs, while increasing property value. Architects, renovation contractors, builders, and real estate professionals are the idea people to involve in these value investigations.

This mental exercise will open doors and expand horizons in ways you may not have been able to foresee. This is research, so step back from anyone intent on getting you to sign a contract for anything until you have had time to explore your options. This may take a while, especially if you have only a few gripes about your current home or cottage.

May I suggest a great place to start? Write out a two or three sentence description of how you want your life to change. Be very specific. I suggest this exercise to clients who want things to improve or who are faced with change they wish to triumph over. The clearer the future is to you, the more likely you are to achieve it. Finish this sentence with what a brilliant outcome represents to you: "When I/we are successful…". If you don't know where you want to end up, how will you know the best way to get there?

Onward & Upward...The directions that really matter!

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  About the author, PJ Wade

12 comments

  • Comment Link Laurel Bill Tuesday, 13 May 2014 10:47 pm posted by Laurel Bill

    This is great advice. It's hard to know what road to take if you don't know where you're going. Thanks!

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  • Comment Link Nikki Tuesday, 13 May 2014 10:34 pm posted by Nikki

    Very good information to consider next time someone looks to buy or sell a home!

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  • Comment Link kungphoo Tuesday, 13 May 2014 12:27 pm posted by kungphoo

    Great valuable information here! Thank you for sharing and providing this advice! :-)

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  • Comment Link Deanna Heiliger Tuesday, 13 May 2014 8:42 am posted by Deanna Heiliger

    There are really any things to consider, and this spelled it out pretty well. Thank you for the insight!

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  • Comment Link PJ Wade  Author of Whats Your Point? Cut The Crap, Hit The Mark  Stick! Tuesday, 13 May 2014 8:29 am posted by PJ Wade Author of Whats Your Point? Cut The Crap, Hit The Mark Stick!

    Thanks for the feedback everyone. Sellers deserve support when facing the complexity of the "Stay or Go?" decision head on at any stage of life or home ownership.

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  • Comment Link Suzanne Otto Tuesday, 13 May 2014 6:55 am posted by Suzanne Otto

    Sellers need to take the emotion out of the equation. I know, easier said than done, but necessary.

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  • Comment Link Yvonne Brown Tuesday, 13 May 2014 5:10 am posted by Yvonne Brown

    There are many factors to consider in this type of situation!

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  • Comment Link Daniele Holmberg Tuesday, 13 May 2014 1:35 am posted by Daniele Holmberg

    These are some great tips for buyers. I will have to use them in the future:) Thanks:)

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  • Comment Link Ashley Monday, 12 May 2014 10:29 pm posted by Ashley

    Very helpful tips for sellers! Thanks for clearly outlining this information.

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  • Comment Link PJ Wade  Author of Whats Your Point? Cut The Crap, Hit The Mark  Stick! Monday, 12 May 2014 8:03 pm posted by PJ Wade Author of Whats Your Point? Cut The Crap, Hit The Mark Stick!

    Glad you both found value in this exploration of a significant seller decision. With real estate and so many important things in life, it's all about the details. The more you understand about what is involved in a particular decision, the easier it becomes to confidently make a decision you can live with...or in, when it comes to your home.

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  • Comment Link Dov Shapira Monday, 12 May 2014 7:44 pm posted by Dov Shapira

    This article is written in such depth.
    Very helpful with great details.

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  • Comment Link Marielle Altenor Monday, 12 May 2014 7:11 pm posted by Marielle Altenor

    Great tips, I'm not a seller but a soon to be buying. I especially like the idea of writing out a few sentences on how we want to change our lives. Things become more clearer when we know what we want for yourself out of life!

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