Archive for July, 2011

The True Cost of Waiting

I Want a Bigger/Nicer Home but…

Over the past few weeks I have talked to many present and past Clients that are current homeowners that would like to move up to a larger or a nicer home, but are patiently waiting for the market to improve.  A frequently heard complaint is that they can’t sell their home for what it is currently worth.

Buying up in a down market is actually advantageous because while you might get less for the home you’re selling, you’re also getting the larger home for less.  For instance, if you had to sell a $400,000 home for a 10% discount, you might feel that you left $40,000 on the table.  However, buying a $600,000 for the same 10% discount would put you $20,000 ahead on the sale and purchase. (The $ 60,000 you gain by buying at a 10% discount minus the $ 40,000 you lose by selling at a 10% discount equals a $ 20,000 profit.)

The other obvious matter is that when the mortgage rate increase while you’re waiting for the market to improve, it dramatically increases your cost of housing with higher payments.  The cost of housing is affected by price and mortgage rates.

To accurately evaluate your current options, you need facts and assessment tools that will provide you the information to make an informed decision. Below is a example that simply illustrates how by just waiting to move up to a larger home while the mortgage rate increases how much more the house will cost while you wait for the market to improve.

Therefore, if you have contemplated on moving up to a larger home now is the perfect time to make that move before the interest rate increases and you end up paying more for the same house.

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