If you own a property do whatever you can to hold on to it as long as you can. If you have to sell, its vital to price your home correctly.
Although no one is absolutely certain what's going to happen now that the country has been downgraded to junk status by two of the world’s leading credit agencies, it's pretty obvious that things are going to change - and not necessarily for the better. The rand continues to fall against the dollar and unfortunately, this means we are all going to be in for a rough ride. Interest rates have to increase, food prices are going to go up and life is going to become more difficult for everyone.
Numerous articles have been written warning against ‘panic selling’. The long and short of it is, don’t sell in a rush and more importantly, don't try and recoup money to cover your debts by overpricing your home. If it wasn't important before, it has now become absolutely vital to price your home correctly before it goes on the market. Forget building in a buffer so you can negotiate the eventual selling price, forget testing the market and seeing if there are any takers at a higher price and don't assume that a buyer is going to be willing to pay an inflated price simply because you want to get out of debt.
This particular situation requires a cool head and logical thinking. Sellers need to weigh up the pros and cons and think of the long term impact as opposed to the short term gains. Life may be good in the immediate aftermath of selling a home. You may be able to pay off some if not all of your debt and live comfortably, but it's unlikely (unless you are very strong willed and work according to a strict budget) that this will last indefinitely. Remember, if you are planning to lease a property, rents will also increase as interest rates go up. What we are trying to say is hang onto your property for as long as possible.
Sell the car and downgrade to a more affordable option if necessary, cut back on entertainment and food costs (make a dent in your grocery bill by growing your own vegetables) re-evaluate your insurance and health needs and downgrade if possible - basically do everything in your power to protect your biggest investment, namely your home.
If there comes a time when it becomes apparent that you simply can't afford the bond repayments, speak to the bank about extending the loan period, thus reducing the monthly repayment. If that's not an option and you have to sell, make sure you price the property realistically. Call on different estate agents to give you a valuation (we recommend basing the selling price on the average of at least three opinions). Ask how the agent arrived at the recommended figure and why they would advise you to sell for that amount. Remove all emotion from the equation and focus your attention on selling in the shortest time possible.
We are in for a bumpy ride and whether you choose to hang on and make the best of a tenuous situation or buckle up and strap in for the duration, most of us are going to have to change the way we live. Make sure you get your priorities straight by holding on to your biggest and most valuable asset – your home – for as long as you possibly can.