I have received many phone calls from past clients asking when I think the market will pick up so they can sell their home. What many people don't realize is now is actually the best time to sell your current home if you are planning on buying a more expensive home. Here are the reasons:
1. There are more first time buyers in a soft market simply because they can afford to buy now, and they have choices. They don't have to "compete" against other buyer's so they are willing to make offers.
2. More first time buyers makes it an excellent time for you to sell your first home and move up to a larger, nicer, more expensive home.
3. This leads to your getting a decent price for your home while being one of the rare move up buyers.
4. You are able to get an unbelieveable deal on a move-up home because you are one of the very few buyers in the higher price range.
Here'e an example to illustrate:
Let's say you bought a house for $100,000 3 years ago. You fixed it up and have $115,000 invested in it. You put it on the market and sell it for $125,000. When you close, you have not made any profit put get back the $15,000 you invested in improvements.
Now you are ready to buy a home too. You find a home for $150,000 and purchase it. This home is twice as big as yoursand does not need any work done to it. If the market was not soft, the house wold have cost you $180,000. The house appraises at $165,000. Even though you did not make any money on your sale, you gain on the new home is approximately $15,000 in this example.
This works out great for move-up buyers because the soft market creates lower prices in the higher price ranges.
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