Trade-Up While The Market Is Down

If you were thinking about buying a larger home for your family, but decided to wait until the market improves, you're wasting money. Mathematically, the best time to move up is when prices are down.

Let's say the value of real estate has declined by 10% for your current residence as well as the homes you would like to buy. Assume your current home that was worth $500,000 last year, can now only bring in $450,000 and that the home you want to buy was selling for $800,000 last year, but today can be picked up for $720,000. Last year the cost to upgrade from your home to the new home would have been $300,000. Now the difference is only $270,000 which is a 10% savings of $30,000!

In addition to the decreased cost difference in today's market, there are other advantages to moving up at this time. In the 2005 seller's market, homes were often selling in just hours at prices well above the asking price. There were limited homes to choose from and no reason for sellers to make any concessions. It was simply a take it or leave it market, but not anymore.

In today's buyer's market, with the larger supply of available houses, the odds of finding a home more suited to your needs are much higher. In addition, with the saturation of housing, sellers are now required to stage their homes for the market. They are spending money repairing and upgrading their homes so they have greater appeal to the limited number of buyers in today's market. This has further improved your chances of finding a better home that is clean, well-maintained and ready for occupancy without the need for you to pay additional expenses.

Moreover, you may be able to capitalize on the slowing market by finding a highly motivated seller. You may even be able to draft a contract that requires concessions from the seller that enhance your purchase. What about having the seller pay all of your closing costs, repaint, or re-carpet the entire house hurt to ask for what you want.

So, if you are planning to upgrade, find an aggressive real estate agent and price your home fairly based on todays market value. Make the move now while the price difference is minimized and there are still great buys to find in this short-term market decline.