Would you like to sell your home, but you have been hearing all the negatives out there about low prices?
" I'm not about to give up all my hard earned equity and give it away" you say.
I say, "you need to consider the home you would buy if your home sold, before deciding whether to sell or not." If your home were to sell, you are probably going to buy another one. Your new home will fall into one of three categories. If you fall into scenario 2 or 3 below, take the plunge and list your home.
"Two out of three ain't bad" as the song goes. Let's take a look at the three possible scenario's.
- First : You want to downsize into a less expensive home. This would be the one instance that you do not want to sell at this time. Say your current home is a large home that just a couple of years ago was worth around $300,000, but you know home prices in your local market are down around 15%. So you would have to offer it at $255,000 to get it sold. If you were going to buy a smaller $150,000 home, you would be able to purchase one for $127,500 which is 15% off those same peak prices. So the net difference to you would be a hit of $22,500 to down size at this time.
- Second : You just want a different home, but as far as price goes it would be of the same value. You will have to discount your home by 15% to get it sold but at the same time you are going to buy your next home at that same 15% discount. If it is not, use your walk away power until you find one that is. So by moving laterally to a home of the same value, it has no positive or negative effect on your money. But I would add that you more than likely are going to get a more desirable mortgage than what you have now. So you might be much better off to sell and then buy a similar priced home. And you know you have just been wanting a new home!
- Third : You want to step up to a nicer, more expensive home. This is the absolute smartest most beneficial time for anyone even thinking about this to pull the trigger. You will be just the reverse of the first scenario. When home prices come back, you will have that extra $22,500 of equity.The larger the upgrade, the larger the equity gained.
So give serious consideration to your next home. It could be the perfect time to sell your home, even if it took a price reduction to accomplish, you might still be ahead of the game.
For a Free market analysis of your home, contact us at Sharon & Greg