Everyone knows that if the goal is financially motivated, the answer is:
Buy LOW and Sell HIGH!
This is an “UPside Strategy.”
The Buyer looks at every property from a non-emotional perspective and considers things like:
- How long will she own this property?
- How will this property appreciate between now and that exit date?
- What level of maintenance expense will be required during ownership?
- If it’s investment property, will it “perform” with stable tenants at rent levels that pay the mortgage, maintenance, periods of Vacancy, and create a positive cash flow?
- If it’s an owner occupied purchase, does it meet the minimum Social, Safety, Community, Location, etc needs of the Buyer? (Note: the financially motivated Buyer will accept marginal standards in exchange for higher probability of profit at the end)
These financially driven people only get emotional when they lose money.
For most others, this process of Buying or Selling a house is WAY more complex . . . because emotions and personal goals and aspirations weigh in.
This real estate thing may be an integral part of “Living the American DREAM!”
The UPside is not only financially driven . . . These Buyers/Sellers have very real personal reasons for making a move and may be willing to sacrifice financial gain in order to live in the right place. Suddenly, the things that MATTER transcend money:
- Living closer to work
- Being in the right School Zone
- Being closer to relatives/friends
- Being in the “right neighborhood” for “Walkability” or amenities – Lifestyle – Parks, Playgrounds, Restaurants, etc
- Being near a place of worship
The real estate market is in perpetual transformation (as are ALL markets) and the Economic, Political, Societal dynamics shift and shape . . . We cannot control or even accurately predict the macro environment.
Given all of the above, many folks keep themselves in limbo as they weigh the pros and cons of moving. When is the “RIGHT” time?
If you’re selling a house in an appreciating market (Like this one), your selling price will likely increase over time . . . so why not wait til next Spring or a year (or 2) from now?
If you want to BUY a house, NOW seems to be the best time because the prices haven’t climbed astronomically (yet) and interest rates are still low but are beginning to climb, BUT . . . there’s very little inventory, so your choices are few and buying in this market may mean you’ll find yourself competing with multiple other buyers to get that house you love.
So . . . as you wait for your house to appreciate (More UPside), the DOWNside is that you’ll be losing ground on the BUY side of the equation. As interest rates and values climb, the buying power of your money decreases exponentially.
What to do?
The ONE thing we KNOW is TODAY’s market.
I think we’re on the edge of a tipping point. Once we tip, all bets and projections are OFF the table . . . no telling what’ll become of the market.
Of one thing I’m certain . . . The inventory of available houses will not increase (enough) to ease the pain on the buying side.
IMHO, the answer lies in a SELL NOW approach even if it means netting less money than you might net if you were to wait . . .
Do this KNOWING that you may need to make an “Interim Move” because the “Right House” to buy may not be on the market yet. So you find a place to store your stuff, and “camp out” in a short term (or month-to-month rental while you shop.
The best part of this scenario is that when you DO find that right house, your equity from the prior sale is in the bank, your loan is approved, and you can be flexible with closing dates . . . all of these are appealing terms for the Sellers of the house you’re buying.
My bottom line . . . consider your WHY before taking ANY action WRT to Buying or Selling a house.
What are the “UPsides” and What are the “DOWNsides?”
If your move is for “Personal Reasons,” quit stalling . . .get yourself MOVING in that direction.
No matter how much it hurts during the process, you’ll thank me once you get there.