Timing your home sale? 10 must-know points to consider before listing

Buying or selling properties in India is both a financial and an emotional decision. There are many factors to be considered before taking the final step, unlike in the case of investment in other asset classes like equities, fixed deposits, or gold.

First things first, timing plays an important role. If you have decided to sell your house, this guide from Housing.com will help you understand key factors that influence the timing of property sales. While property transactions take place the entire year, there are some specific time periods that make marginal differences to the deal.

Impact of months on real estate sector

October to December: Festivities galore

Although a lot of time is spent on deciding the location, budget, configuration etc., majority of the property purchase activities are finalized during festivals in India as big-ticket purchases are preferred to be done during the auspicious period. One of the high points of the real estate market is the third quarter, October, November, and December that has festivals back-to-back. Dusshera, Diwali, and Christmas all follow each other in a row. This is the time of attractive home loan offers that encourage investments in the real estate segment. Selling properties around this period will result in a good deal for sellers. However, there are some disadvantages too. While there is room for everyone in the market, there is serious competition from other sellers.

January to March: Year closing period

March 31 is the last date for the closing of the financial year. Due to this, one can witness increased real estate activities in January, February, and March so that the last-minute investments can serve as proofs in tax savings.

April to June: Financial year beginning

Most people receive bonuses by April. As it’s a large component, it is generally invested. This period too has festivals like Gudi Padwa and Akshya Tritiya, which up the market sentiments and investments around this time may ensure good returns. With two months left for the new academic session to start, people contemplating a property purchase often close the deal so that they can move in before school starts.

July to September: Lukewarm market

Shravan month starts around this time and people avoid making big investments around this time. In south, especially in Tamil Nadu, it is called the ‘Aadi Maasam’ when no new work is taken up. There are a few activities seen during Ganesh Chaturthi, especially in Maharashtra, which ends once Pitru Paksha starts, which is from September 17 to October 2, this year.

During the time that is favourable between these three months, people pursue home buying activities as this is the peak rainy season period in most parts of the country. People take their buying decisions during this period to access the property to know whether it has any leakages or water logging issue in society, etc.

Economic conditions

Now that you have some understanding about the impact of various months, the next point of focus is how much are you willing to sell? For selling any property, you should fix the correct price so that you can earn profit from it. Having an estimate of the returns on investment (RoI), helps you fix a price range so that even after the negotiation with the buyer, you can earn profit from your sale.

Role of ROI

• It helps arrive at a price.
• Tell you if you are selling the property at a loss or profit.
• Helps you decide if it’s a favourable time to sell your house.

To calculate RoI, you first need some data in hand.

Cost of acquiring property

Brokerage: The money you give for using brokerage services, if you have hired one.

Property cost: The money spent for buying the property

Cost towards paying stamp duty and registration charges

Home loan interest: If you have borrowed a home loan, what is the interest on it?

Cost of maintaining property

Maintenance charges that you may have paid to the society

Property tax that you should pay annually if you own a property

Money spent on painting, repairing, or renovating the house

Costs you may incur for selling property

Brokerage: The money you may have to give for using brokerage services, if you hired one.

Advertisement: If you have opted for any listing or advertisement, you may need to pay some amount as fees.

Once you have all this data with you, you can calculate the RoI, using the formula:

RoI= Present value of property – Cost of property x 100

                                Cost of property

Calculate the RoI when you approach two-three prospective buyers and evaluate if the timing for selling the property is correct.

Points highlighting that you are ready for selling property

• Going by what is explained, if your property is fetching an excellent RoI, you should seriously think about its sale. This happens when the market is going strong. This can be understood by doing market research.
• Your present home is small for you and your family. With people growing old, there is a need for more space. Also, post covid, most of the workplaces have either work from home or hybrid model of working. This makes it imperative to have permanent office space at home. You may also want to upgrade it as the house you bought in your twenties may not match the preferences you and your family may have now.
• The opposite of this example may also be true when your children move out for further studies or take up jobs in other cities. You may feel that the space is big for you and your wife and difficult to manage. Most people under these circumstances choose to downsize and sell their existing properties.
• You are the owner of a property that has amenities which are dysfunctional, but you are charged more for maintenance.
• If you have strong equity, you can sell your property. Note that if you sell a property within less than five years of purchase, you may incur losses. It’s a good idea to hold on to the investment for at least a period of five years so that the portfolio becomes strong.
• While everyone will pray not to experience this, we should be prepared for the worst. If you are facing monetary issues and the house, you had secured as an investment is becoming your savior then why not sell it?
• When you and your siblings inherit a property then the property is tried to be sold so that there is one owner instead of multiple. The sale amount is split according to the share inherited.
• Higher interest rates can reduce a buyer’s affordability and can lower property values potentially. On the other hand, lower rates can increase buyer interest and offer prices. Monitoring interest rate trends can help you time your sales effectively.

How can you sell your property?

• You can sell your property by either opting for broker services, or by selling it yourself. While the former involves an easy and smooth process, the downside may be that you may have to pay a commission to the broker as his fees.
• This commission is steep and may range between 1%-2% of your property value.
• The other option is to sell your property on your own. You can check our detailed guide on how to sell your property on your own. Note that there are a few points you need to know before picking this option.
• For starters, if you are selling the property, you should be patient because it may take you more time than what a broker may take unless you have a ready buyer. You should also be clear about the legalities. Also, brokers may have contacts in the registrar’s office and know steps to follow in case of any issue, an advantage you may not have if dealing independently.
• There may be instances when the buyer may give you the token amount and ghost you to appear after six months, asking for money. In the case of a broker, he/she will deal with this unethical behaviour, and you may be able to keep the token amount as part of losses incurred. If you are dealing with sales alone, you may have to be prepared for what needs to be done in such circumstances.

Housing.com POV

Once you have made the decision to sell your property, it is important to conduct market research before making the final decision. Property transactions are significant financial undertakings, and you should be a thousand times sure that you are well-informed to get the best deal from your investment. For this, do not take hasty decisions. Think about each offer you get and analyze the present market conditions, the property sales that have happened in the area, economic trends, etc. It’s a good idea to take the help of a lawyer or a real estate consultant to understand if the deal you are proceeding with is positive.

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