When it comes to selling your house, there really is no best time for it and it depends on your circumstances. For most cases, you will want to take into consideration your personal priorities, urgency, the condition of the house and local seasonality, both the holiday seasons and the real estate market condition.
To give you an example, the worst time to be selling any property is in the year 2021 when lockdown is in full force, COVID-19 pandemic has rendered the local Malaysian economy to a grinding halt. Property prices are at 20% – 30% lower than what it usually is with many defaulted properties on bank auction. If you ask me, this is perhaps the worst time to be selling when buyers are spoilt for choices.
However, if your personal situation is not great and you need the liquid cash to sustain the family and business, perhaps it is better to sell off a few properties, albeit at a hammered price. Otherwise, you might be better off getting the property rented out until the economy recovers.
So what are the things to consider before putting my property on market?
What should I consider when choosing the best time to sell the house?
To put it simply for you to take away after reading this post, I will categorise the considerations into 3 main components.
- Firstly, it starts with yourself – what is your intention for selling?
Do you need to sell the property now, urgently? - Secondly, is the property in a condition to attract your target customer?
If you are looking to sell the house with a good premium, is the property dressed up to fetch a good price?
On the other extreme, if the property is in a terrible state that requires a lot of work and rehabilitation, are you willing to let go at a fairly discounted price? - Thirdly, is it the right time to be putting the property on market now?
Is it a holiday season where all your advertising effort and money will go to vain?
Or, is it the right real estate market condition to be selling your property now?
Let us explore these considerations deeper. I hope through this writing, we get to understand your requirements better and answer the personal question, is now the right time to be selling the house?
#1 Do I need to sell the house urgently?
Every one of us is in a different stage of our lives. Some of us could be at the crossroad of a new journey in life with a spouse. You could also be in a really comfortable stage where things are looking up for you in both your career and financial standings. In some cases, you could also be at a point in your life where you will need to move for the job, a better job offer in another city that pays well. For some, you are looking to sell the property to realise profit and consolidate your portfolio.
Here are some really common and real scenarios of why a homeowner/property investor would want to sell their property,
- Getting another job that requires you to move to another city/state
- The family is getting bigger and have outgrown the current home
- The baby birds have left the nest, it is time for the parents to downsize and simplify living qualities
- An improved financial situation and looking to move into a better place
- A desperate need to unlock capital from the property to sustain livelihood/business ventures
- To finally realise actual profit on the investment
- To reduce and consolidate debt
While there are many other reasons why one would want to sell their house, I believe the list above covers most cases.
Depending on your situation, the question we need to tackle – “do I need to sell the house urgently?” and “is there any benefit for me to rent out the property instead of selling it?”
Look, if you are in a tough situation and you really need to cash out on your property, then the answer to the question is straightforward. There is a priority and urgency in getting the property sold as soon as possible to finance your livelihood or your business venture, that is something more important than the property.
In situations where having liquid cash is important, here are some tips to help you decide which property should you sell first,
- Selling the most valuable property you have in your portfolio can attract buyers quickly, especially if the property is tenanted.
- Selling properties purchased a few years back might be a good idea, especially when the current market value is higher than your purchase price.
- In the worst case scenario, you might need to liquidate at loss – which is not ideal in any situation.
Contrarily, if you are not in a rush, will it be better to rent out the property, collect passive income on the side than to sell the house?
Scenario 1: If I am to sell the property, is now the right time and can I get good offers for my house? If you are in a seller market, you may be able to get good offers on your house when there is more demand for housing as compared to the available inventory.
Scenario 2: To consolidate my portfolio/reduce debt, can I reservice my mortgage loan and group the properties together under 1 mortgage loan? Typically, this can be done through refinancing your mortgage loan – best to consult your servicing mortgage bankers.
Scenario 3: I am moving to a different state and it gets very difficult to manage the property remotely. In this case, it can be a good consideration to sell off the property in this case, especially when the property is valued higher than when you purchased it. Otherwise, having a property manager to manage the property on your behalf can also be a good idea.
#2 Is the house in the best condition to attract a buyer?
If you want to fetch a good premium with your house then the house ought to look good and be in decent condition. If you are in a rush to get the property sold and could not be bothered with uplifting the place, you always have the option to sell the property “as-is” but do not expect to demand a good price for it.
In my personal opinion, it is always worth the time and effort to get the place touched up. I am assuming that your property is well-kept and maintained on a regular basis that there should not be any major overhaul needed. In such a situation, the cost of uplifting – painting and cleaning up of old furniture – should be inexpensive. However, the returns on having the property looking presentable have scaling returns.
The idea behind this is to tap on the buyers’ emotions. If the property looks comfy, homely and everything a family needs, the chances of them buying the property is higher and in most cases, with a premium as well. This is the power of emotions in the sales process.
On the other hand, if the property looks terrible, run-down, absolutely disastrous, despite the fact that it does not cost much to repair and rehabilitate, it becomes a debating point when it comes to price negotiation. From my observation, many homeowners lose a premium on their property because of how the property looks and is deemed by the buyer as bad and desolate.
#3 Have you considered the holiday seasons?
Malaysia is a country filled with many public holidays. I have friends in the UK and the States complaining about how unfair life is in Malaysia because of the many public holidays we have! Here in Malaysia, we have 2 main holiday seasons annually where you can expect to have families flying domestic or international for family vacations.
- Year end holiday season – Christmas in December, trckling into the new year and coming to an end late January
- Mid year holiday season – Starting mid-July, lasting all the way into mid-September
From my experience as a property agent, I can safely tell you that the holiday season does affect how aggressive the market behaves. The months in December all the way into late February, are considered quiet months for property sales. This is because families are off celebrating the new year, Lunar New Year and in some years, Hari Raya Aidilfitri. Similarly, you have the mid-year school vacation in July and August.
Personally, the holiday season should not be a reason to stop you from listing your property on the market. If you believe the time is right to sell your house, then, by all means, put up the “for sale” sign and go through the viewings. The more enquiry you entertain, the higher the likelihood is for you to sell the house.
However, if you are really cost-sensitive and advertising your property do cost some money, then you might want to consider advertising your property starting the month of March.
#4 Have you considered the real estate market conditions?
Generally, you want to be selling your property in the peak market condition to really get the best returns from your property. Some of the tell-tale signs are the past transaction prices, speed of selling, local trends and the mortgage interest rate.
If you have a good grasp of the local real estate market, then you are in a better position to decide if it is the right time to sell your house now. Here are 5 key factors for you to observe and to developer a good intuition of the local real estate condition,
- How many homes were sold in the past months?
Comparing this number of transaction against the same month in the past few years, is it better now? - Are the prices of properties transacted now higher than before?
If there is a noticeable trend of properties transacted at a lower price, it can be indicative that the market is going through a tough time. - What is the average time for property listings?
If the property is listed for extended periods, it can also be indicative that there is not enough buyer in the market now to substantiate the pricing. - What is the local trend?
If the local trend is gearing towards rental properties, it might be a high time for you to sell your rental properties, securing good returns on your past investment. - What is the current mortgage interest rate?
Generally, a higher mortgage interest rate will require the buyer to stretch their budget to get the home they want. When the rates are lower, first-time buyers are in a better financial position to buy a home.
Selling in a buyer’s market
Generally, a buyer’s market exists when there are far fewer people looking to buy a home than the number of available homes for sale. In such situations, the seller can expect their home to stay longer on the market with far fewer offers. At the same time, sellers may need to accept offers going at a much lower price than they hoped.
If you want to make a good return on your property, it is better to hold off any thoughts of selling your house in a buyer’s market.
Selling in a seller’s market
Generally, a seller’s market exists when there are far fewer homes for sale than the number of people looking to buy. It is the ideal time to sell your property, as you are likely to receive more offers, some even higher than your asking price, and the opportunity to sell it off quickly.
How do I get started in sell my house?
It is not difficult to sell your property in all honesty. If you have the time and commitment to manage the viewing and enquiries by yourself, then it is better to sell it yourself. However, if you do not have the time and is willing to spend some money to engage a property agency, having good property agents can be really effective.
1. The Mr Do-It-Yourself
Personally, I prefer to sell my property on my own. It is as simple as getting good pictures on your property, listing them on the property portals and entertaining enquiries that come your way.
Below is a quick step-by-step guide on advertising your property, yourself,
- Get your property ready for sale
As mentioned earlier, clean the house, give it simple uplift and make it presentable for an open-house. - Take good pictures that will attract your target buyers
When you advertise your property, you need to remember that you are competiting with many other sellers doing the same thing. If you do not have a good featured picture, it can be really difficult to entice buyers to click into your advertisement. - List it on all the popular property platforms
There are so many platforms out there right now for the Malaysian real estate market. If I am to recommend a few good ones, I would recommend you to use iproperty.com.my (1st choise), propertyguru.com.my (2nd choice), mudah.my (3rd choice – It is free for owners but very different market segment). - Entertain the enquiries that come your way
One little trick I use is to arrange for all the viewings to happen at the same time. At the viewing time, I tell my potential buyers, first come first serve, whoever puts an earnest deposit first gets the property. - Upon receiving an offer, read the terms and conditions before accepting them
Not all offers are the same and some of them might not be beneficial to you, the seller. If you are happy with the terms and conditions, accept the offer and the earnest deposit. The earnest deposit typically is worth 2% – 3% of the agreed sales price. - Get your lawyers to go through the transaction process with you
Now that you have a firm offer, it is time to engage your lawyers and to get them to go through the paperworks. Upon signing the sales and purchase agreement (SPA), collect your down payment. The total upfront payment typically paid is up to 10% of the agreed price, that will be 3% earnest deposit and the remaining 7% as down payment. - Upon receiving full payments from the buyer’s bank, it is time to transfer the title
2. Engage Property Agents
Property agents are there to make your life easier but at a cost. Here in Malaysia, the maximum commission allowed by JPPH, the board that oversees property agents, is 3%. If you have any property agents coming to you asking for more than 3% commission, it is your right to put them aside.
When it comes to engaging property agents, the main function of property agents is to market your property and have it sold as quickly as possible. In other words, their main function is to take pictures of your property, advertise it on property platforms at their cost, and entertaining any request for viewings on your behalf.
Looking at the steps above, you will notice that a property agent’s main function is to take care of steps 2 – 4.
If you are a very busy man and do not have the time to entertain the many enquiries that comes your way, then it is ideal to engage a property agent to assist you in selling your house.
Here is my article on how to pick the right property agent to help you sell your house.
How long does it take to sell my property?
The time it takes to sell your property depends on numerous factors such as the house condition, property market condition and good advertising. It can go anywhere between 3 months to 3 years and in some locations with poor desirability, there might not even be any demand for the house.
What I can tell you instead is how long it takes to process a property transaction here in Malaysia, depending on the land title – freehold land or leasehold land.
Here is the quickest time to transact property, according to their land title,
- Freehold land – 3 months
Freehold land do not need to go through state authorities when the property is transferred from one name to another. Most of the time taken in this transaction is the paperwork required from the bank. - Leasehold land – 6 months
Leasehold land is unique in a sense that the land, whilst having your name, is technically not yours but the government’s. Because you are “leasing” the land from the government, you will need the government’s involvement to transfer the title from your name to the buyers’ name. Hence, this adds another 3 months to the transaction period.
Final Word
As mentioned at the start, there really is no answer to when it is the best time to sell your home.
Having that said, I hope the guidance I put up has been helpful to you in considering whether if you should be selling your property now. If you are selling your house, I wish you the very best.
Until then, take care.
