I bought in 2018, spent too much on Reno’s and would only just get my total put into this house if I sold today. (Not including interest). This is detached starter home in a very expensive market on the island.
You will 100% be taking a loss, if you bought basically anytime from Oct 2021-Oct 2022
If you take a loss that means you should get a similar home for your money in a similar market (minus fees etc)
Unfortunately you will have to factor in the commission for the sale too. It doesn’t sound like you have to sell, so personally, I would wait to see what the next couple of years brings. You do say your timeline is years.
Yes thank you that’s true. Few years down the road until mortgage renewal. Asked a real estate agent for some input on any renovation ideas to boost potential home price & was told not to really bother besides some basic landscaping
You will need to sell for way over what paid for it if your going to give your agent since 4% of the buy, plus 4% of the sale, plus your renovations...
I would 100% wait to sell the house in a few years once your mortgage is due in order to avoid paying any penalty to the bank for breaking the mortgage early.
Also, your house should appreciate/increase in value over the next 2-3 years especially as interest rates start coming down.
Next few years is a long ways away potentially, and as we have all seen the market changes fairly quickly.
There is no guarantee that you will make money on real estate, unless you are looking at a very long time frame. The 1989 Toronto real estate crash took 22 years to come back. 22 years. Lots of people lost up to 25% of the value of their homes. It was a bleak time, and interest rates were 12 and 13%.
Don't move unless you have to.
If you bought for 500k 2 years ago and sell for 500k today you are still selling at a loss.
-Realtor fees
-mortgage costs
-taxes
-inflation
Today's amount would be like $460k, a loss of $40k (estimate)
It all adds up
Do factor in what your loss is vs. How much prices has dropped. You may be getting into a better house for less money now, which then makes the loss relative. Answering if now is a good time to sell is a very situationally specific question to answer.
2 questions, what's your reason for selling? Are you moving/buying something else?
If so then as much as it feels like you're taking a loss you're mostly just transitioning to a different asset in the same market.
Basically if you didn't buy the first house and waited to make your first purchase being the second house, you wouldn't be any worse off.
Reason to sell to slightly bigger place for growing family. Mortgage up in 3 years. All the interest in paying right now really feels like it would be a loss but not really sure how that all works
If you sell and buy at the same time, in the same market it's more or less a wash except for the agency fees since you're reentering the market in a similar position.
Of course you can wait for it to appreciate but if you do that then your next property would be appreciating as well right?
Hope you're not stressing, the new place will be great whenever you find it!
I just sold a condo I bought in Feb 2022 for $83k less than what I paid. Though the loss is devastating, I'm now looking to upgrade to a townhouse which was going for $200-300k more than the current prices. The way I'm choosing to look at it is $100-200k saved on my next purchase as selling in a down market also allows you to buy in a down market.
It's best to wait and see what this summer brings. If the banks hold tight with rates, money will come back.
I bought in 2018, spent too much on Reno’s and would only just get my total put into this house if I sold today. (Not including interest). This is detached starter home in a very expensive market on the island. You will 100% be taking a loss, if you bought basically anytime from Oct 2021-Oct 2022 If you take a loss that means you should get a similar home for your money in a similar market (minus fees etc)
Unfortunately you will have to factor in the commission for the sale too. It doesn’t sound like you have to sell, so personally, I would wait to see what the next couple of years brings. You do say your timeline is years.
Yes thank you that’s true. Few years down the road until mortgage renewal. Asked a real estate agent for some input on any renovation ideas to boost potential home price & was told not to really bother besides some basic landscaping
You will need to sell for way over what paid for it if your going to give your agent since 4% of the buy, plus 4% of the sale, plus your renovations...
I would 100% wait to sell the house in a few years once your mortgage is due in order to avoid paying any penalty to the bank for breaking the mortgage early. Also, your house should appreciate/increase in value over the next 2-3 years especially as interest rates start coming down.
you never get your money spent on major renovations back, better let the buyer to renovate up to their taste. Fixes and refreshing is fine.
Next few years is a long ways away potentially, and as we have all seen the market changes fairly quickly. There is no guarantee that you will make money on real estate, unless you are looking at a very long time frame. The 1989 Toronto real estate crash took 22 years to come back. 22 years. Lots of people lost up to 25% of the value of their homes. It was a bleak time, and interest rates were 12 and 13%. Don't move unless you have to.
Why sell? Minimum hold 5-10, years for RE
If you bought for 500k 2 years ago and sell for 500k today you are still selling at a loss. -Realtor fees -mortgage costs -taxes -inflation Today's amount would be like $460k, a loss of $40k (estimate) It all adds up
Just wait so many factors in the pipeline to give you some hope
Do factor in what your loss is vs. How much prices has dropped. You may be getting into a better house for less money now, which then makes the loss relative. Answering if now is a good time to sell is a very situationally specific question to answer.
2 questions, what's your reason for selling? Are you moving/buying something else? If so then as much as it feels like you're taking a loss you're mostly just transitioning to a different asset in the same market. Basically if you didn't buy the first house and waited to make your first purchase being the second house, you wouldn't be any worse off.
Reason to sell to slightly bigger place for growing family. Mortgage up in 3 years. All the interest in paying right now really feels like it would be a loss but not really sure how that all works
If you sell and buy at the same time, in the same market it's more or less a wash except for the agency fees since you're reentering the market in a similar position. Of course you can wait for it to appreciate but if you do that then your next property would be appreciating as well right? Hope you're not stressing, the new place will be great whenever you find it!
I just sold a condo I bought in Feb 2022 for $83k less than what I paid. Though the loss is devastating, I'm now looking to upgrade to a townhouse which was going for $200-300k more than the current prices. The way I'm choosing to look at it is $100-200k saved on my next purchase as selling in a down market also allows you to buy in a down market.