Part II--NOW is the TIME to be moving UP! OR Down!

Part II—Now is the time to move on up or empty that Nest!

4. You’ve thought of adding on or remodeling? Have you priced a remodel or room addition and are stunned at the cost? You think to yourself, “Man, for a few dollars more I could move and get a much bigger more modern home.” And if you did add-on would you be over the market for your neighborhood? Being the biggest house on the block is never a good idea unless all the other homes are equal size. But maybe you can’t add-on due to lot size, neighborhood restrictions or zoning.  Or perhaps you value your marriage or relationship with your partner more than going through the rigors of a major home remodel. Moving up is getting very attractive and is becoming a more viable option.  

5. Are you comfortable moving in the current housing market? Committing to selling and then moving up in a very tight inventory market is always daunting. Currently in Sonoma County our MSI or Month’s Supply of Inventory is only 2 months. A “balanced” market is usually 4-6 months’ supply. Plus our DOM or Days on the Market is only 55 days. It’s not a problem of selling your house but finding the move-up home which is the issue.  Committing to make the move could mean selling your home with no move up property available. You can do this with a contingency in your contract that the offer is subject to you finding a replacement property. This can be very tough when what you are looking for is in a very desirable area with little or no inventory and prone to attracting multiple offers from likeminded purchasers. Your options? Check to see if you have enough financial wherewithal to pull cash out and make a purchase without having to sell your current home.  This is called using a “Bridge or Swing” loan. Then you can either sell your current house with little pressure or better yet—hold it as a rental and start creating real estate wealth.

6. Are interest rates attractive? Absolutely! Many professionals in the real estate financial services sector have been touting inevitable rate increases. They see the Federal government borrowing heavily, project an increase in inflation which historically sends interest rates soaring. I’ve been hearing this now for the past 4 years. It is just not happening.  Even when the British “Exited” we didn’t see anything to speak of.  The Fed increased rates early this year, 25 basis points (1/4 of a %)  and the home interest rates market dropped! We hit a low of 3.5% and currently have FHA in the 3.25% range.  Plus the down payments are very flexible. 3% down is not uncommon with some of the big lenders. I know Wells Fargo has a terrific 3% down program. Talk to your lender about how you can use these super low rates to achieve your dream of a move-up home.  You may be able to sell and NOT place all of your money into a new home. You could qualify for a smaller down payment and put the money to use in other venues. Also, if your home needs work and you feel like staying in place then check out refinancing or even an FHA 203K rehab loan. But if you are moving up with these super low rates and a big down payment you might be able to make that move-up decision a no-brainer.