The perfect time to trade up
There have been a lot of new slang words that have crept into our everyday vocabulary during the past several years. One term that is particularly applicable to the real estate dilemma we find ourselves in is "reality check." According to Wikipedia, reality check means coming to terms with what is actually happening rather than what one chooses to believe. Perfect, right?
There are still a lot of sellers who haven’t quite come to terms with the real estate market, but every day more and more are experiencing their own personal reality check. What this means is that buyers are negotiating prices even they can’t believe. But what if you already own a home and have been dreaming of trading up. It could be a very good time.
With home prices down more than 30 percent from their peak, trading up now can land you a bigger house at a bargain price. True, the value of your current home may not be what you had hoped, but the amount you’ll save on the higher-priced home should more than offset that. Remember 30 percent off a $500,000 home is a lot more than 30 percent off a $200,000 home. In addition, if your current home qualifies as a first time or starter home you’re in the price range that’s currently hot.
Naturally, your personal finances have to be healthy enough for you to qualify for financing on a new home, and that home has to be one that can be financed. Look around for bargains to trade up to. Short sales and foreclosures are the obvious ones, but working with real estate and mortgage professionals can give you a lot of insight and information about properties whose owners really need to sell trade up homes for financial or personal reasons.
It may even be possible to negotiate a sales contract contingent on the sale of your home or at least the right of first refusal if another buyer comes along. Also, assume prices are going to go down even further and negotiate that into your offer, which is exactly what the buyer of your property will do. Buyers are in the driver’s seat and have a lot of leverage in putting together deals with both individuals and banks.
Last week I spoke about buying scams in Las Vegas, where qualified people are purchasing move up distressed properties at half their original value and then walking away from their former home. I am by no means suggesting this as a viable option. However, homeowners who have the financial ability can use this point in time to trade up to the home of their dreams in a legal and ethical fashion, which will actually benefit the market as a whole.
Reality check and buying opportunities can co-exist in the real estate market. If you want to trade up to the waterfront home you have lusted after or the 4,000 square foot cutie around the corner, it may be more possible than you think. You just have to check in with your reality.
