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TRADE UP! 5 Reasons why this is the BEST market to upgrade!

Real Estate Agent with Keller Williams Realty - Beverly Hills BRE# 01421366

Have you thought about getting that bigger, better house in a better neighborhood?  


Whether you need more space, want to upgrade your location, or for any other reason, the current real estate market presents a unique opportunity to capitalize by trading up! 

5 reasons why this is the best market to trade up!

1. You will make money NOW on the trade!  

Here's how this works. You currently own a condo that was worth $1,000,000 three years ago, and now it's worth $700,000 (that's right, it's gone down 30%!).  You may be thinking, I've lost $300,000, right?  Wrong!  

What you do is go out and sell your condo and purchase the home of your dreams for $1,400,000.  That house, three years ago, was worth $2,000,000 and you probably couldn't have afforded it.  By buying it now, what you've just done is bought your new home at a $600,000 discount!  Just like that, on the trade, you've made $300,000!  This doesn't even take into account the money you'll save on property taxes because you're paying taxes on a $1.4M house, and not on a $2M house.

2. ... AND you will make money LATER when you sell your new home!

OK you've listened to my advice, bought that new home of your dreams and traded up. YES!  Fast forward five years and the real estate market has gone up 20%.  Let's take a look at what has happened.  Your old condo is now worth $840,000, for a $140K gain over today's value.  Your new home is worth $1,680,000, or $280,000 more than when you bought it today.  Just like that, you've made an extra $140,000 on the trade!

Your New Dream Home!3. You can likely buy a house you otherwise could not have afforded, and may not be able to afford again!

Going back to my example above, you probably couldn't have afforded that $2M house three years ago when you bought your condo.  You also may not be able to afford it again in 3 - 5 years when the market rebounds. If you've been dreaming about a bigger home or one in a nicer area, now is really the time to capitalize.

4. It's much easier to trade up in a down market than in an escalating market!

I've had clients say that they will trade up when the market "goes back up."  Let's take a close look at that.  Let's say that 5 years from now, the market is back up 20% from today's values.  You then sell your condo for $840,000 and your dream home is now worth $1,680,000.  You've gained $140K on your condo (from today's values) BUT your dream home is now worth $280,000 more!  That means that, by waiting, you've now spent an extra $140K to buy that house!

5. You'll probably get a better house by trading up in a down market!

The current market presents some very unique opportunities.  In most areas, inventory is pretty high and buyers have a lot of great choices.  By shopping in this market, you can really get the home of your dreams and take your pick of all the inventory available.  In most cases, you can get a good deal on a great property in a terrific area.

The bottom line is that if you can afford it, now is a terrific time to upgrade!  Interest rates remain at historic lows and there is plenty of financing available.



Beverly of Bev & Bob Meaux
Keller Williams Suburban Realty - West Orange, NJ
Where Buying & Selling Works

This is truly on a case-by-case basis and you have to look at all the numbers. If you have the income to move up and handle the new payment, it could probably well work for you. Because if you are waiting for your house to increase in value to afford a better more expensive house, won't that house also probably increase and you still won't be able to afford it? Many people need to sit tight.

Dec 15, 2009 11:42 AM
Dolores "Dee" Mauriello
Keller Willaims - Wayne, NJ
Realtor, Homes For Sale Wayne NJ

Daniel I love your excitement and enthusiasm. I wish all buyers could see the opportunity out there.

Dec 15, 2009 01:40 PM
Susan Thompson-Solomons
Monument Sotheby's International Realty - Solomons, MD
Southern MD Real Estate-Solomons Specialist

You make some excellent points here. It's very important to point out the positives and back them up with stats. Yes, there are many who are not in a position to take advantage of the opportunities in the market right now, but there are those who are who are in a totally negative mindset who are not just receptive to looking at opportunities they may be missing. Your approach is positive and much needed.

Dec 15, 2009 01:47 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

The idea of saving money on taxes makes sense here in California with Prop 13 being part of the equation.

I think there is a lot of opportunity for move up buyers right now, and I think you've pointed out several of them.

Dec 15, 2009 03:13 PM
Josh Asanovich
Smart Concept Realty, LLC - Gold Canyon, AZ

Great dream and ideal ... however not very realistic for most!!

Dec 15, 2009 03:31 PM
Mark Warner
RealEspace - Plano, TX

The math seems a little fuzzy to me. If you lose $300,000 on the condo and only gain $280,000 on the purchase and appreciation of the larger home that still is a net $20,000 loss, not counting the transaction costs involved.

You alao have to assume that the $300,000 of cash lost in the sale of the condo was not cash that they needed to make the down payment on the new house.

Dec 15, 2009 05:26 PM
Deborah Grimaldi
Grimaldi Appraisal Services - Cranston, RI
(401) 837-9633

Daniel I have a seller in this exact situation and I was trying to explain these things to him just the other day. Good information.

Dec 15, 2009 10:17 PM

Daniel,  In every market correction opportunities are created and those who can seize them.  There will always be those who say I wish I had bought when i had the chance. 

Dec 16, 2009 01:32 AM
Ty Lacroix
Envelope Real Estate Brokerage Inc - London, ON

Daniel, thank you for your thoughts on this, brilliant! It is also amusing to read the comments on this blog, I believe that attitude is a determining factor in someones success


Dec 16, 2009 01:36 AM
Ed Vogt
Midwest Properties of Michigan - Grandville, MI
Grandville, MI Midwest Properties

I was actually in a class yesterday and the speaker was talking about this at great length.  Looking at it the comparison on the chart makes sense.

Dec 16, 2009 02:58 AM
Danny Batsalkin
Keller Williams Realty - Beverly Hills - Beverly Hills, CA
Los Angeles Real Estate | 310.432.5706

Ty (#102) - that's really a great point!  I've been reading the comments to my post and there are really some interesting ones!  I do believe that as agents, our Attitude, Approach and Expectations account for 90% of our success.


Dec 16, 2009 03:36 AM
Jennifer Palmer
Integrity Mortgage Group - Escondido, CA

I truly dont want to burst anyone's bubble, and you're blog was so inspiring I had several light bulbs going off at the same.  The bottom line though is this:  a homeowner can only do that if it is not a short sale situation.  The reason is, lender restrictions to purchase a new home once a short sale goes on your credit report. 



Dec 16, 2009 08:27 AM
Danielle Pierce
Platinum Realty and Preservation - Chicago, IL

I tell my clients this all the time. In fact, I am not just talking the talk - I am in the process of "upgrading" as well! Congrats on the feature.

Dec 18, 2009 01:40 AM
Dana Smithers
PRES Staging Resource Centre - Vancouver, BC
PRES Staging Training, Redesign Training & Busines

Interesting comments and all have value. I enjoy reading them. I think if you are 'risk adverse' then you are not going to be doing what you are suggesting and as you say your clientelle are likely to move forward with your choices. I prefer to see buyers buying what they can realistically 'afford' right now and in the near future, and waiting to see what happens with the economy. Another post indicated that the average 1st time buyer is 44 years old - so old enough to have some wisdom yet fairly old to be buying their first home. Much to ponder...keep the posts coming.

Dec 21, 2009 09:36 AM
Bernadine Hunter, SFR, ACRE
Keller Williams Greater Columbus Realty - Pickerington, OH
"Finding Solution to Your Real Estate Needs"

I have always believed that this is the perfect market for moving up if you can afford to. Its true that when you're in a good place, good things come to you. The opposite is also true, at least for the short term.

Dec 23, 2009 12:50 AM
Rita Minion
O'Brien Realty - Solomons, MD

Hello Daniel,

Terrific post!  Thank you for sharing it with us.  You made some excellent points. 



Dec 30, 2009 12:04 AM
Noah Levy
Coldwell Banker - Highland Park, IL
Coldwell Banker Highland Park IL


Awesome post - I have to re-blog - your points are good!! The numbers with your example actually work in my market too!!

Happy New Year!


Dec 30, 2009 12:27 AM
Danny Batsalkin
Keller Williams Realty - Beverly Hills - Beverly Hills, CA
Los Angeles Real Estate | 310.432.5706

Thanks all, for reading the post, and for the great comments!

I think it's been pointed out a few times that this only works if you can afford to do it and it fits your situation. I concur with those thoughts.

Also, I have a few of these "trade-up" clients about to complete the tail end of the transaction, so I will be posting some "success stories" as soon as we close.

-- Danny

Dec 30, 2009 03:22 AM
David Epprecht


It is impossible to argue that by selling one house today and buying a more expensive one at today's prices, (whatever difference that might be) that you are making a profit.  The definition of a profit is a positive monetary gain after subtracting expenses.  If real estate prices appreciate then you will make a profit when you sell.   Using the kind of logic found in your first point is what got us into trouble to begin with.  Theoretical profit doesn't pay your bills!  Points 2-5 I like.  Again, I know it is tempting to believe in point 1, but the fact is there is no profit now.

Dec 30, 2009 03:24 AM
Chris Minion
O'Brien Realty - Lexington Park, MD

Hello Daniel,

Terrific post!  Good information and points about now being a great time for homeowners to move up!  Thank you for sharing! 



Jan 23, 2010 07:43 AM