Wading Through Financial Troubles: Why Rushing to Sell Your Home May Not Be the Best Option

South African homeowners burdened by financial woes and finding it tough to keep up with bond repayments might presume selling their property to be their best or perhaps the only feasible option. But Brendan Michie, the Director at Hammond Pole Attorneys, warns against rash decisions which may further aggravate their situation.

Each individual's scenario varies so a generalized approach may not always apply. Michie states, “Selling too soon after buying, especially during a down-market, could lead to significant losses.” He further emphasizes that personal circumstances play a pivotal role in such decisions, making them complex and often tough.

Holding onto your property for an extended period is encouraged as it allows homeowners to amass equity and obtain the advantage from potential property value growth. Meanwhile, ensuring costs linked to property sales can be covered is crucial. Hence selling isn't always the most beneficial solution for financially strained homeowners.

Grant Smee, Managing Director of Only Realty, echoes these sentiments. He advises cash-strapped homeowners to avoid resorting to a hasty sale and urges them to calculate the financial implications before choosing to sell. Metrics like the property's market value and inflation, costs incurred during ownership, and potential agent's commission on sale must be factored in.

Smee further suggests factoring in potential sources of income like rental, if the property has been previously let out. The final figure derived, known as the break-even value, indicates the minimum price to sell your property at. Any excess leads to profit, but if a homeowner is far from reaching this value, Smee advises considering other alternatives like renting, cutting unnecessary costs, or increasing monthly home loan repayments.

Michie concludes with essential guidelines for effectively selling a house - knowing why you're selling, hiring the right estate agent, studying the current property market, understanding the selling process, and organizing your financial and legal affairs.