When Selling, Look at the Whole Picture

Question:   I knew real estate prices in my area dropped, but I was shocked when a Realtor told me how much my home was really worth in this market. Should I wait for the market to boom again?

Answer:   Time marches on, not backward. Waiting for real estate prices to return to pre-recession levels before you put your home on the market, means you don't understand that time only goes forward. Forward from here, there are no real estate booms immediately on the horizon. Yes, we'll see booms again, but wait for the next one, and you'll end up financially behind all those that keep their money moving and multiplying in today's markets. This waiting loss is compounded by the fact that every passing year makes your house one year older. That's "older" in every way from dated decor and appliances to out-of-date plumbing and everything else. This means that, when real estate prices increase, your home will be discounted by the renovation factor - the perceived cost of bringing the house up to current standards. If your resale home does not look "nearly brand-new," buyers see second-hand real estate which warrants a second-rate purchase price.

Look at the whole picture: As a Seller, you can gain in the long run if you buy a home in a location where market values have dropped, just like they have in your current area. It can give you the opportunity to buy your dream home at a big savings. Here's why: Say the market value has dropped 30% in your area, and 30% in the area where you can buy a larger, more modern home with everything you want, then since your new home is worth more than your current home, you are actually coming out ahead! 

The net gain from selling and buying is what should be considered, not just the profit from selling. Often the obvious gain in selling is to be free to take the next step in your life and to move to a new home, ready to start a lot more treasured memories.