If you are moving up in price to your next home then waiting to make that move may cost you thousands of dollars!
Here's How:
Perhaps you want to sell your home and move up to a larger home and you are considering waiting until the market "improves" so that you can get more money for you home. Everyone wants to get the most for their home but the reality is that the home you will be buying will be priced higher too. So by waiting for a better selling season you may lose overall by paying more for your new home.
Example 1: Wait until the market "improves"
Your house value now is $300,000 and when the market "improves" you are able to sell your home for 10% more at $330,000 for a gain of $30,000.
If the new home you will buy is $400,000 today and you wait until the market "improves" to buy it then the same market increase of 10% would apply to this house. Raising the house value to $440,000 for an increased cost to you of $40,000 A gain of $30,000 when you sell minus a loss of $40,000 when you buy Equals A net loss of -$10,000...
Example 2: Sell now
Your house value now is $300,000 and the market is "not doing well" and is down 10%. That means that you can sell your home today for $270,000 for a loss of $30,000. If you then buy a house valued at $400,000. In the same "down market" you will save 10% to make the purchase $360,000 for a gain of $40,000. A loss of $30,000 when you sell plus a gain of $40,000 when you buy Equals A net gain of $10,000.
So for the person moving up in the market who decides to wait until their home goes up in value that's a negative swing of $20,000 and even worse... amortized x 30 Years x 6% = a loss of a whopping $43,167.64.
Need a double take? If you move now that's a positive swing of $20,000... amortized x 30 Years x 6% = a gain of the same whopping $43,167.64.
Don't be fooled by the illusion of lost equity. When moving up to a larger home a soft market can net you thousands of dollars in savings and added equity. Plus, right now mortgage rates are below 6% which will save you thousands more and give you a lower payment for the life of your loan. Find out your projected savings by contacting me directly at andy@eteamcares.com or visit my website and read more out of the sheep pen strategies at www.eteamcares.com
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