Managing your money is key at all times, but it is perhaps most crucial when undertaking or overseeing life-changing investments such as buying and selling properties. In this guide, we’ll explore some steps you can take to maintain control of your finances.
Plan ahead
Planning ahead is beneficial when it comes to buying or selling properties. Selling usually involves putting money into another property and many people choose to buy and sell simultaneously. If you are planning to put your home up for sale and buy a new house, it’s important to ensure that your home is ready for sale and to consider how you’re going to sell the property and how much you can afford to spend. Set a budget based on the value of your downpayment and figure out how much you want to borrow if you’re taking out a mortgage. If you’re making plans based on a projected sale value, be realistic about how much your home is worth. A valuation is a rough guide, and it doesn’t necessarily reflect how much a buyer would be willing to pay. It’s best to be cautious when planning so that you don’t overstretch yourself if the house doesn’t sell for as much as you anticipated or hoped.
Consider selling options
There is a range of options available to sellers now, including hiring a real estate agent, selling online or using services like Open Door. Choose an option based on your circumstances, how quickly you need or want to sell and what kinds of services and features you’re looking for. Hiring a real estate agent, for example, will take longer and cost more than finding a company that buys houses for cash, but you could end up getting a much better price. Take your time to weigh up each option, think about the impact on your finances and conduct research to see how the market is moving in your local area. If houses are selling rapidly and demand is growing, you may be able to sell swiftly without having to compromise on price.
Be realistic
When it comes to managing your money when buying or selling a house, it’s critical to be realistic. If you’re looking to buy, research the local market and set a budget based on how much you can afford. You may find that you need to compromise to find the right property or expand your search area to locate more affordable houses. If you have a limited budget, try to be open-minded and look for potential. If you’re selling, get several valuations and keep a close eye on what is happening in your local area. If houses are selling fast, there’s good reason to be optimistic about getting a price close to the top end of your valuations, but if the market is slow, it may be much harder to sell and offers may be lower. Try to budget and plan based on worst-case scenarios to ensure that you don’t get into trouble or face pressures if the house doesn’t sell for the asking price.
Factor in all costs
Buying a house doesn’t just involve paying a purchase price. Buyers also have to factor in legal fees and extra charges such as surveys and searches and moving costs. For sellers, there are also costs to cover, including legal and real estate agent fees. Research costs, get some quotes and make sure you have an accurate idea of how much the acquisition or sale is going to cost you in total. You don’t want to find your dream home and then discover that you can’t afford it because you’ve underestimated how much the entire process is going to cost. It’s particularly important to be aware of additional costs if you take on a project or a fixer-upper. You’ll need to factor in the purchase price and then the cost of work needed to design your perfect home. Take your time to get and compare quotes, make sure they include all the relevant taxes and charges and try to ensure you have a contingency fund in case there are delays or changes to your plans that require more work.
Buying and selling properties can be complex processes, which involve significant financial transactions. Whether you’re looking to purchase a new home or you are selling up, it’s crucial to take control of your finances, to plan ahead and to ensure you don’t stretch yourself too far or find yourself in a situation where you need extra money to cover unexpected bills.
