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Buying up in a down market
It's no surprise to anyone that the housing market isn't the strongest. Does that mean it's a bad time to sell your existing house and look to upgrade to a new one? NO. Many sellers don't understand this scenario and how it can be very beneficial to your overall financial heath while capitalizing on this soft buying market.
Prices aren't at their strongest but follow the simple breakdown below and it will explain how you can make money in this buyers market. Although it varies through different ranges, I'll be using round and easy numbers for this explanation.
Facts: Current home value $100,000. Value of dream home $150,000. Market is down 10%
If the value of your home is currently $100,000 after the 10% adjustment, it would be worth $110,000 after the market returns to a more normal state. Currently your down $10,000. If the value of your next home is also down 10%, that would mean the $150,000 home is worth $165,000 in a different market. A difference of $15,000. You close on both. Once you subtract the initial sale "deficit" of $10,000 by the $15,000 you just gained...your ahead $5,000!
A very simple concept that can have large gains. Consider it over and if you still have questions on whether or not this is a fit for your ... more
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