Your Questions Answered
At Ashlar, I firmly b that an educated home buyer or seller is best equipped to make their own decisions. That’s why I take time out of my day each and every day to answer someone’s real estate question. And, when I think the answer can be useful to you as well, I share it here. So without further ado:
The most important part of selling your home is deciding “Why am I selling?”.
That makes the subsequent decision-making much easier. Selling just because “the market is ripe” only makes sense if it’s an investment property or if you have a specific goal in mind.
New addition to the family or need new space? Obvious decision to sell.
Market at an all-time high on a rental home you bought 8 years ago? Can be a no-brainer decision if you rather cash out than have that monthly stream of income.
New job in a new city? Again, the decision-making is straightforward.
The problem with simply trying to capitalize on high prices is that you need to change your place/criteria to see a positive benefit. This is because generally speaking, all home prices increase and decrease at roughly the same rate in an area.
So sure, your home may be up 180%, but so are the other homes you decided not to buy previously. And the homes that previously were 180% above your home’s value when you bought have roughly kept that distance.
So to keep the same payment you need to stay in the same class of property, though honestly, it will more than likely be significantly higher due to property tax reassessment upon sale.
Upgrading using entire proceeds of the sale can be attractive if you want to upgrade but your payment will change according.
Downgrading to either a less desirable neighborhood, metro area, or smaller home, or different class (SFH -> Condo) is about the best way to put a huge chunk of money in the bank, but many times that doesn’t make sense from a lifestyle standpoint.
The daydream stuff such as selling the house and living in a van or traveling the world for a year or two is all well and good but more than likely a few years down the road the money will be gone and you will be looking for housing and a job somewhere in the country back at square 1.
You also have additional flexibility such as refinancing or building additions to customize your home to your liking. Plus as an added bonus your housing costs are relatively fixed in an extremely popular and desirable area.
If it sounds like I’m trying to talk you out of selling (whaaat? A Realtor Doing That?) I’m more trying to get you to think about why you are considering selling in the first place. Once you have that goal or decision in place it makes the rest of the process much, much easier.