Is Selling in This Down Market a Consideration?

It may be the thing to do!

You do not need to let a slow market keep you from selling if you want to change your lifestyle! 

If your property is worth less and you end up selling for less, it may be OK. Why! Because after selling low, you will also buy low. If you wait, the value of your property may go up but the price of whatever you buy will also go up. Either way, as long as you continue to own a property, you break even.

Even if properties continue to go down after you buy, that’s OK, too. Here’s why! When prices are up and you sell high, you have to buy high, too. If prices are low and you sell low, you get to buy low, also. You sell for less but you make it up because you buy for less, too!

Example: Let’s say you find a place you want to buy for $200,000. You decide to put your place on the market for $250,000 but it does not sell. After six months, you drop the price to $225,000 but it still does not sell. After six more months you lower the price to $200,000 and your place finally sell for $180,000. That means your place has gone down from $250,000 to $180,000. That’s a 28% drop in value.

If your value has gone down, what has happened to the value of the property you wanted to buy? It started out at $200,000 but the market has gone down 28% since you first saw it. You would be able to buy it for 28% less than $200,000 or $144,000.

You ended up selling for less, but, you bought for less, too. So, you’re OK in the end.

It’s not the amount of money you have in a property that sets the sales price. It’s the market at the time you need to sell. If you had $200,000 in your place and the market went up, you would not sell for ‘what you had in it’. You would want a higher price because of the market.

If that’s true, than the following is also true.

If you had $200,000 in your place and the market went down, you would not sell for ‘what you had in it’. You would have to sell for a lower price because of the market; knowing values had gone down, because you wanted a different kind of property than you have now. If you wanted to change your lifestyle, lower your price so we can sell it for you.

Another great reason to sell and buy now is the interest rate on your home loan. Right now, because of the slow market, the Feds have kept the rates really low. You can get a 5% rate or maybe even less. When the economy turns around, the first thing the Feds will do is raise the interest rates for home loans. So, by selling now, you really will do better than break even. You will actually gain because you’ll be paying much less interest on your home loan.

Thanks for reading my post, Curtis Irving

P.S. if you really want to take advantage of this slow market with low prices and low interest rates……consider buying one or more rental properties, lock in you interest rate and hold until the prices go up. J