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Why would I want to sell in this market
Patio, Fire pit, City lights, Mountain views
I know there are a lot of people wondering why they would want to sell in this market. Of course there are always those that don’t have a choice. Right now we have one client that is being transferred much sooner than expected and they have to sell their home so they can relocate. We aren’t relocating but we want to sell.
If you aren’t relocating and you bought in the past 3 years, you might want to wait. At least that is what I thought until this week.
Yesterday I outlined three things that are being worked on to try and Stimulate the real estate market and the economy.
- Senate OKs $15,000 credit for home buyers
- House moves to redo rescue plan for homeowners
- 30 Year Fixed Interest Rate of 4% being proposed
We have been thinking about selling our home
World Traveler as I refer to our daughter is now in college. She has moved and we are “empty nesters”. We bought our 2500 sq. ft. home with a 3 car garage within walking distance to the High School. That was our criteria when we bought.
It wasn’t mountain views, or pool, big back yard or any of the things often associated with the purchase of a home. Our purchase was governed by two criteria: Three car garage, Walking distance to school. Now that world traveler is in college in Minnesota we don’t need this home with that criteria. We would like to find something else for this next stage of our life together. Something with a pool or community pool. A home with views, outdoor cooking area and city lights at night. A place with a fire pit where we can sit and watch the sun set and roast a marshmallow if we want. It has always been our plan to move once world traveler was in college. We started in the fall with the first step in our plan.
Get the house ready for the market
Looking at the place with a fresh eye. Making sure everything about the home is well maintained and all routine maintenance is done. Furnace filters changed, Stucco and roof in good shape, landscaping presentable, interior and exterior painting where needed, updated lighting in the baths, all ceiling fans in good working order, etc.
Going room by room making sure everything is how we would want it to be if we were buying our home.
Prices for products related to remodeling and updating have fallen considerably over the past few months. If I were the newspaper reporting it I would say they have “plunged”, but I’m not the newspaper.
Even with the Tucson real estate market seeing reduced sale prices it makes good sense to be ready and have the home in good working order. It is nicer to live in as well.
Since our home is a family home it makes most sense to put it on the market when most families are moving. Spring and Summer after the children are out of school is the time most families move. That was our goal when we set our plan in motion. Then this fall and winter saw the economic turmoil take place and prices have fallen even further. We don’t have to move, it is optional for us, but we would like to move. We have a lot of equity in our home, but even so no one wants to sell a home for less than they have invested in it. That is what would happen to us if we sold now. We could get our original purchase price for the home, but the $50,000 in upgrades we put in wouldn’t be covered.
On the other hand, right now since we would be buying a home as well as selling one we can get a lot more house for our dollar than we could 2 years ago. So because we might loose some money doesn’t mean we couldn’t actually come out ahead in the end.
The stimulus package possibilities
Now with the possibilities of a $15,o00 tax credit and a mortgage interest rate of 4%, it might be even more viable for us to sell and buy another home in 2009. We aren’t going to simply assume that because the newspaper is selling doom and gloom about the Tucson real estate market that we should hunker down and wait till prices go back up.
Because prices for what you want to buy as well as what you are selling go up. Yes, we pay commissions to sell and buy real estate even though we are real estate agents. The smaller the sale and purchase price the smaller dollar amount paid out in commissions.
Every person or family situation is different. There is no “GREAT” time to buy or sell for everyone or every situation. There aren’t very many people selling an home that won’t need another one to live in. And usually if it is a good time to buy it isn’t necessarily a good time to sell.
But right now, with the low interest rates and if we get the $15,000 tax credit for buying a home (possibly before Sept. 1, 2009) it could be a little painful to sell but very affordable to buy.
At any rate, we will continue to get the house ready for the market and make our decision once we see where things are going. No matter what the stimulus package provides “It is always a good time to keep your home maintained and repairs up to date”. Remember that old Fram commercial “You can pay me now or you can pay me later”.
If the market and economic conditions warrent, we want to be ready to act. Having our home ready to sell is the first step in the process.
“little painful to sell but very affordable to buy”
Oopsie, can’t agree with you on this one. Any loss on sale you would make up on the purchase, so it’s a wash. Sell NOW and live where you two want! It would be different if you were moving to a another area where costs were still crazy, like say San Francisco, but that is not the case.
As to the StimUseless package, be careful. We don’t know what the house/senate conference committee will settle on. As in, will the 15K tax credit have to be paid back? I don’t want to shock you, but I don’t trust the “buggers”. Me thinks this will end up being mostly pork. Yes, I will love being proved wrong.
Chris
@chris swenson – Sorry Chris, but that’s poor logic and not true. If I take a loss on the sale price of but buy down and have a smaller mortgage at a lower interest rate I end up saving quite a bit of money.
Your observation is only true if the home were paid for completely. But anyone with a mortgage doesn’t actually “own” the home yet.
Over the life of the loan we would end up paying less in interest and would end up saving money.
Dave,
My thought is that prices may not be coming up anytime soon. So why stay in the home longer than you want to? Your decision to sell is a lifestyle choice, and if you can downsize the house, and the cost of the mortgage, it’s a win-win, as you’d be lowering your monthly costs (including utitlity costs), but at the same time getting the house that best suits your needs for your current lifestyle. This is all regardless of any stimulus package incentive or non-incentive. I revert back to the old standby, “There’s no time like the present.”
Part of the reason the govenment is devising these ‘stimulus options for buyers’ is to get them off the fence once and for all, in the hopes that “housing will be the first to recover.” Good luck to you in your decision, and the world traveler in her studies! I say- do it! Don’t put your dreams on hold. We all have to go on with our lives, recession or no recession…
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Have a great weekend
Dave
You make a lot of great points about selling a home in a market such as this. Thanks for your advice, I didn’t think it was possible to sell our home, but I now know that we can do it.