Selling a Real Asset
In Snap, you can illustrate the financial impact of selling a home and either:
- Downsizing to a less expensive home or condo,
- Purchasing a more expensive property,
- Becoming a tenant at another property
Snap gives you full control over the sale price of the original home, the cost of the new home, how any surplus cash is invested in a downsizing scenario, and where the funds to purchase a more expensive home will come from. You will be able to compare scenarios easily. First, you may wish to make a copy of the original scenario so that you can refer back to it after creating a new home scenario.
Steps to Sell a Real Asset and pay off the associated mortgage
In this example, John Snapper plans to sell his home in 2025 and pay off the mortgage with the proceeds.
Go to Scenario Setup -> Assets.
Enter a Future Sale Age for the Real Asset. The age to enter is the age the person (whose page you are on) will reach by the end of that future year.
By clicking the gear icon to the right of the cell, you can enter a future sale date (YYYY-MM-DD) if you prefer. This gear icon is only visible when your mouse is over that cell in the table. Snap will automatically adjust the Future Sale Age for you based on that date.
Pay off the remaining mortgage (if applicable) in the year of the sale of the house. The mortgage will be automatically paid off at the sale date if you have linked the debt to this real asset. On the Debts page, under the Real Asset column, select the asset to link to this debt. Note that you are only able to link debts and real assets if they are owned by the same person (i.e. a mortgage that has joint payments must link to a jointly owned real asset).
The proceeds from the sale of the Real Asset have been used towards the Mortgage repayment of $112,261 then towards the desired After-Tax Spending need, and the rest is automatically contributed to the RRSP, TFSA, and Non-Registered accounts. If automatic cash-flow management had been turned off in the year 2025, the proceeds from the sale of the home would have been assumed spent and no contributions would have automatically been made and you could enter contributions manually instead.
At this point, consider whether, after the sale of the home, the client's After-Tax Spending need will increase, decrease or stay the same. There will be no more mortgage payments, but will the client now be paying rent? You can modify the client's After-Tax Spending and re-run the scenario to update the projections.
If you wish to illustrate the impact of the client purchasing a new home at this point in the projections, click on the applicable link for details.