Think Selling Your House Will Solve Your Money Problems? Think again.

Think Selling Your House Will Solve Your Money Problems? Think again.

 

Swimming in debt?

You’re not alone.

Over 70% of Canadians have debt, and the average family has $100,000 of it. [1]

Planning to get out of hawk by selling your house?

Between increased debt and the rising cost of living (have you seen the price of cauliflower!?!), it can be tempting to sell and make a fresh start.

But there are a few critical flaws in that plan.

 

NEEDING A MIRACLE

 

If you’re at the end of your financial rope and need a miracle in six months or less, selling may not work for you.

One client learned this one the hard way. High on debt and low on cash, she needed to sell and fast.

Unfortunately for her, the market had slowed and she was not in a desirable location. Translation: she could realistically expect 6-12 months for a sale to happen.

It didn’t sell in two months, so she decided to try selling privately. It was the worst time to pull all the marketing because the bank was hovering, using words like ‘foreclosure’. She was desperate.

It was only a few months later the property was listed again, this time on behalf of the bank. She’d lost the house, and any profit it would have yielded her.

 

WHEN THE SALE WON’T COVER THE DEBT

 

It baffles me how often people expect the price of their home to be determined by either their sentimental attachment or the size of their consumer debt load.

But it happens all the time.

“But Tina, can’t you get MORE for my house than market value? I really need the money.”

Sorry, no. The market is what it is.

One’s inability to live within their means does not increase property value.

This principle also applies when one wants to sell a vehicle, firewood, or second-hand pumps on kijiji. Things are worth what they’re worth, regardless of how wealthy or desperate you happen to be.

 

MONEY IS NOT THE PROBLEM

 

Money doesn’t solve money problems.

Just ask the many lottery winners who are worse off after coming into a pile of cash.

Debt is not the problem, it is the symptom.

Maybe someone else caused your debt. Maybe it had nothing to do with you.

But chances are what got you into financial doo-doo was not a lack of money. It was a lack of self-control and a failure to live within your means. It is, in a word, entitlement.

“It doesn’t matter what you think you deserve, it doesn’t matter what you think you need, it doesn’t matter what you think you have to have to fit in. If you don’t have the money, then you don’t need to be incurring the responsibilities, the debt and the obligation” (Dr. Phil.com)

Getting an infusion of cash from selling your home may get you out of hawk for a while. But unless the habit of overspending is changed it will continue to pull you into debt.

__________________________

The market is what it is.

Real estate agents, while completely awesome, cannot actually work magic and force your house to sell in a week.

Selling your house may be part of your financial restoration, but don’t let it be the only part. The plan should also include ditching the habits that got you into that situation in the first place.

Tina Plett, Sutton Group-Kilkenny Real Estate

 

 

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