Good afternoon Real Estate Professionals. I wanted to share this blog written by my buddy Leander McClain. He is a Real Estate Agent in New Jersey and is always posting useful information. If he is not showing a customer why its still a good time to sell and buy real estate, then he is telling them what's going on in Jersey this weekend (with driving instructions) - oh yeah and a blog about the "Man Cave"..
This particular post is filled with great information, including a breakdown of the homeowners 'loss' in value to their current home, but a 'gain' in value to their new purchase. Do you currently provide this to your customers?
These days it seems that most Realtors are focusing buyers. Many agents do not want the task of selling a home in this market. You hear..."it's a great time to buy a home", it's a buyers market, "there are too many sellers and not enough buyers". Well I am going to make the argument that NOW may a great time to SELL your home.
Let's make a couple of assumptions. 1) Your current home is a 4 bedrooms, 2.5 bath, 1,500 square foot home in a nice neighborhood. Two years ago, your neighbor sold the identical home for $250,000. Data suggests that home prices have fallen in your area 10% over the last two years. You are interested in a larger home (3,000 square feet) and this home sold for $400,000 two years ago. Data suggest that home prices have fallen in this area by 10% over the same 2 year period.
Right off the bat, the data in table one suggests that you receive $25,000 less for your home. However, there are some positives. Based on a 6% commission rate, you will save $1,500 on real estate commissions. You will also save another $375 on closing costs (based on 1.5% of selling price). To sum it all up, you will receive $23,125 less for your house than if you had sold it two years ago. Now here is where most people stop...and they don't get
THE REST OF THE STORY.
The house that you want to purchase has also faced the same price drop. The home that would have sold for $400,000 is now ON SALE for $360,000. Right away, you are saving $40,000. You will have to put down $8,000 less for a down payment and your closing costs will be $1,600 less. Overall, you will be paying $49,600 less for this home. That is almost $50,000 in your pocket.
..but not so fast slick
Remember...you just lost $23,125 when you sold your old home. In the end, you will end up on the positive side. Your gain on the purchase of the new home will offset the loss you faced when you sold your old home.
In this example, the homeowner saved $26,475, is living in a home that is twice the size of the old one and paid less/square foot. So the next time someone tells you that this real estate market is only good for buyers.....tell them, "not in all cases"
Have a great day. I will be out here in Burlington Township, Burlington County, New Jersey trying to round up some sellers that like a good sale.
Realtor & Real Estate Consultant,
Exit Buyers Plus Realty, 15 E. Broad Street, Burlington, NJ 08016
I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice. If you are available to talk, I am available to listen. Give me a call or visit my website for more details.
Do you want to know all of your mortgage options? Call me today and let's discuss them further.
Always available for your Texas Mortgage and Home Loan needs!
John R Cannata P#214.728.0449
NMLS # 322646
The views expressed on this site are mine alone and do not reflect the views of my employer.