A lot of (would-be)sellers are asking that question right now.  Should they sell their homes to buy another that better suits their needs… or hang tight and make changes to their current home.

I understand. I really understand.  As the father of a four year old and a 4 month old… I understand.  As the husband of a wonderful wife that goes back and forth between those ideas, I REALLY understand.

And it is NOT an easy question to answer.  Here, let me give you the National Association of REALTORS® party line… Now is a GREAT time to buy!

Ok, that’s out of the way.  Now the truth.

This might be an incredible time to buy a home.  It might also be a terrible time to buy a home.  I can sit here and make a case for why you should buy a house right now, but it just isn’t something that is true across the board.

The case to trade up…

Let’s say that you live in a house that has eroded from $250,000 to $225,000 (10%), and you are looking at a house that went from $500,000 to $450,000 (also 10%).  If you took the $25,000 loss on your existing home, you would save $50,000 on the step up home.  So, you are $25,000 ahead.

Let’s couple that with interest rates in the low-mid 6% range.  We have been spoiled in the last few years, but this is a really low rate.  And, if inflation starts to get worse, the Fed will raise rates… and that will eventually (but not directly) lead to increases in mortgage rates.  So, the price may go up… but the payment may go up faster.

Even if interest rates stay low, it is likely that prices would start to recover. So, this really can be a great time, if you can get past the fear… or give up on catching the falling knife (tryng to time your purchase to the one day with the lowest price).

The case to fix up…

Loan products available today are not what they were a year or two ago.  $0 down, 125% loans are NOT happening.  You need to have a down payment.  You need to have decent credit.  You need to have equity.

So, if you don’t have those things, staying put might be better.  Even if you do have those, you might be able to make what you want more easily than buying it.

But, the one thing that you need to keep in mind is “neighborhood norms”.  Meaning, if you live in an area of 1800 square foot ranch homes that are sided with a two car garage, adding a second floor, a wing with an extra 1200 square feet, brick and a 3 car bonus garage isn’t going to make good sense.

And I have been to that house. Mr. Seller wanted $400,000 for a house in a $250,000 subdivision… and he was losing his shirt at that price.

Another nice thing about doing the remodel is that you get to live in it.  I see sellers all of the time that throw a pile of money into their house in order to sell it.  I hate it for them.  They go through all of the aggrivation and pain and expense of a remodel, and never really get to enjoy it.

Wrapping it up…

It isn’t an easy question.  I can’t tell you the answer.  I can help you with some of the data… but in this case, answers aren’t coming from me.  There are some great opportunites, but they aren’t for everyone.

If you are thinking of making the jump, we can talk about it.  A good second step would be to see what is on the market.  There are almost 10,000 homes for sale in Gwinnett County, GA… but that doesn’t mean there is a perfect home for everyone.  Almost… but not everyone.  A good first step is to figure out if it is an option.  Talk to a good mortgage broker… a GOOD one.  And think about it.

If you need to change school districts… you can’t make that happen with a hammer and some tile.  If you just want some fresh surroundings… you don’t have to go across town for that.

Don’t hesitate to shoot Lane a message if you have any questions, or need any help. And check out the new links for FREE Property Searching, FREE Comparative Market Analysis and FREE Market Reports. They are near the top of the page…