Why you should avoid huge expenditure when selling your home
If you are one of the half a million households in the UK that is trapped in negative equity, you may well be looking for a way of selling your home in the next 12 months. After all, you cannot afford to continually make mortgage repayments that exist outside of your means, while the current market provides an ideal opportunity to capitalise on inflated price points.
As a case in point, the price of the average British home increased by £18,000 last year, peaking at £299,000. This rate of growth is more than three times higher than earnings, and while it cannot be sustained indefinitely it offers a limited window of opportunity for home-owners to optimise the resale value of their properties.
If you are to sell your home quickly and make the most of this window, however you will need to adopt a relatively strategic approach. The first thing to remember is the relationship between cost and profit, as any money that you spend to help drive a quicker sale must be deducted from the bottom line completion price. So while there are plenty of home modifications that deliver a considerable ROI, the cost of these may well prove prohibitive.
So while the typical conservatory delivers an estimated ROI of £5,750, for example, the cost of £5,300 may have limited effect in an economic climate where price points are already at a premium. The time taken to complete such work (even if the product in question goes well does not incur any delays) can also be problematic, especially if the current rate of growth does begin to subside during the second and third financial quarters of 2016.
In short, if you are to achieve your goal of completing a relatively quick sale that optimises the resale value of your home it is important to resist the appeal of large-scale investment. Quick and simple modifications are far more effective, so long as they add value in a competitive market where demand is high. Those of you who are particularly forward-thinking may even prefer to avoid completing modifications at all, as there is a more simple and effective sales solution available in 2016.
If we accept that price points are currently vastly inflated, the quick house sale market may offer the ideal balance of speed and profitability in 2016. After all, firms such as Quick Move Now or Property Rescue can complete direct cash transactions within seven working days, while handling troublesome compliance and legal costs.
While these firms are known to purchase homes for less than their real-time market value, they usually offer between 75% and 80% of the full price. In a market where property values are already vastly inflated, even a reduced sale enables home-owners to profit and claim a return on their initial investment.
*Women doing paperwork photo from Shutterstock.
*This is a collaborative post.
We are trying to see our house and Ughh!!!!! We listed it in the winter here in NY and yeah…. I guess people really don’t house hunt during the winter -_-
Good tip on the quick and simple modifications being more effective. It’s easy to get caught up and go too far.
Such a great resource that could be so helpful for someone planning to sell their home anytime. No one is going to be happy to lose money & sell for a lesser price & it is important to plan better.
Being financially savvy is important at all stages of life. This is especially true when trying to make a huge transition like selling your home.
This is very interesting. Selling a home can be a very emotional time, let alone when you have negative equity.
I would think that if you’re selling you might want to do upgrades but you don’t want to spend absurdly amounts of money especially if you’re not getting any of it back.
Looks like Property Rescue will really help homeowners to sell their house. I love that the turnaround time is only seven days. Thanks for letting us know about this great service.
It’s important to consider this when you’re making such a big decision. A fast transaction could be the best option in some cases.
This is great information if you are selling your house. If I was selling I would be interested in a cash offer.
This is great information for anyone looking to sell their house! It’s so important to be informed about the process.
We don’t have negative equity, but our values are much less. It would be sad if we had to lose money and sell.
That’s a very interesting read. I’ve never thought about this method of selling before. Thanks for sharing.
My sister just bought her first house. She closes on Friday and I am so excited for her.