When is it the right time to sell your home and buy another one so you can make the most money?
Many people are asking this. Well, let's go over some numbers. Say you have a $200,000 home to sell right now in the Salt Lake Valley. We would have to go over statistics for your specific home and neighborhood but for an example we will just go with a safe number. Right now the odds of selling your home in your neighborhood is 25%. What about the odds of selling a home in a neighborhood where there are $400,000 homes? The odds will drop to about 2%. As you can see there is more demand in the neighborhood currently where you are selling and less demand in the area that you want to buy. This means two things. You are selling high....and buying low.
SHOULD I WAIT? What are the costs of waiting?
Lets look at the cost of waiting. Yes, last year you probably could have made more money selling your home. Are you fixated on that number from last year? It could cost you more money if you wait to achieve that number. So you can sell your home now for 200k...but last year you say you could have received 225k? So you want to wait till you can get 225k? Lets look at that. Going from 200k to 225k is a 12.5% appreciation level. The home you want to buy now is 300k? The difference in price right now is 100k. Let's see what the difference would be if your home went up to 225k. Lets timex 300k by the 12.5% appreciation level and we get: $337,500. Now the difference is $112,500 instead of $100,000. You just lost $12,500 by waiting for a good market to buy a home.
If its a softer market and you are under or close to the median price range, the bets are you will be able to score on selling your home and moving up. Recently I just saw homes that were selling for 900k 2 years ago sell for $620k today. Waiting for your home to appreciate $100,000 cant make the type of money that you could make if you are willing to sell your home for what you can get and find a great deal. There's always an opportunity to make money....if you know how to find it.