It is pretty hard to hear about all the price increases in the real estate market without having the thought “I wonder what I can get for my house?”. Believe me, I think about it often. I have had several clients who have called me to capitalize off the current boom and in some cases I have advised them against it. I am sure it sounds pretty stupid, given that I make my living off selling homes, but sometimes it just doesn’t make sense to sell your home!
I believe selling a home is only good if it is financially or significantly emotionally beneficial to you. Sellers often forget that although they are capitalizing off a strong sellers market, they also have to BUY in the same market! When you start to add in all of the closing and buying costs of a new home, you sometimes aren’t netting as much as you initially thought. Below are some questions I have my clients answer before I give the green light.
1. Are you looking to move to a more desirable location? This is an emotional choice, but for sure the best one. You are likely going to be paying more for the same house in a more desirable area, but you are getting a value increase in location. The added equity you get from the sale of your current home can go directly to the purchase price of your new home. You will likely have a higher monthly payment, but you wouldn’t have to draw funds outside of the sale of your current home.
2. Are you making a significant size upgrade? If so then this market is a good time to make a move. The more expensive a home gets, the less competition it has from buyers. It is likely that you will be able to find more wiggle room and even get a steal in the higher end homes. So you can capitalize of the high sale price of your home as well as taking advantage of buying below asking price.
3. Are you downsizing or retiring? If so I 100% recommend to sell right away. It is quite simple, you are de-leveraging yourself which in my opinion is always a good thing. You are going to be in a position where you are greatly reducing your mortgage and the monthly payments AND put money back in your pocket. If you have no mortgage, even better!
There are many other factors that can weigh on your decision but if you can answer yes to any of those three questions you will be happy with your choice to move. Your home is what holds most of your equity and a large portion of what you will likely retire on, so it is important to manage that investment properly. If you have any questions about this blog post or any other real estate related questions contact me at any time. All the best!