moving down in an up market

Moving “Down” in an “Up” Market

It is the fourth quarter of 2020 and we are in an “Up” real estate market. Selling a larger home and buying a smaller lower priced home that better meets your needs can be an advantage for you. Your advantage is that you can maximize your selling price and not be forced to reinvest all your profit into a replacement home.

As an example, let us say there is a 10 percent premium in the current sales price of a home. If this home is selling for $750,000, that premium would be $75,000. If you were to replace this larger more expensive home with a smaller $500,000 home, the premium would be $50,000 which would put you $25,000 ahead.

How about we assume you have a debt free home that you are selling with a large cash equity. Instead of reinvesting all that cash, get an 80 percent loan with today’s historically low interest rates and reinvest the profits to supplement your retirement.

Available mortgage rates might be as low as 2.5 percent and be able to earn more on the proceeds in other investments.

Homes are selling on average in three weeks with home prices being up significantly over last year. There is less competition for selling a home with the inventory so low. From August to September, closed sales increased 9 percent according to Zillow.

Another advantage to moving down in an “up” market is property tax savings, home insurance savings, lower utilities and less maintenance while taking cash out of your sold home to reinvest in retirement.

Think of it as using “other people’s money” to gain back some of your equity and reinvest at a rate higher than what you will pay on your new mortgage. The difference is your profit.

To explore this opportunity, give me a call and we’ll look at your numbers.

Want Some Insider Information on Fairfax VA homes for sale? Get a FREE Market Snapshot Report of Your Northern Virginia Home’s Value, or  Search All Northern Virginia Homes For Sale. Put that data you need at the tips of your fingers!

Leave a Reply

Your email address will not be published. Required fields are marked *