My New Blog

Some of us wonder, "Should I sell now since prices have fallen and try to buy later when prices have fallen further?"

My answer is this: Never gamble with your personal residence. If you are going to sell now and then rent for a period of time before buying you are taking a big risk at not being able to buy in the future. Once you sell and begin renting you're at risk of not being able to re-enter the ownership market if things go bad for you personally or the market changes quickly. However, if you feel you've outgrown your current home and have decided to "buy up" then now is the time to do it (and I'll explain how to do it without any risk). The reason? Relativity. What I mean by "relativity" is that everything is relative. If you buy high you will sell high...if you buy low will sell low. But there's one factor that makes the relativity factor very important in regards to timing: Property Taxes. Since property taxes are assessed using the purchase price of your home your property tax bill will go up when you buy up (bigger = higher price). The only exception is if you are over 55 and will be taking advantage of prop 60/90 (transferring your base tax of your current home to your new home). So, it's better to sell low and buy low than to sell high and buy high since you intend to spend many more years in the newer bigger home.

So, how do I buy up without any risk? I'm glad you asked. You do it by selling your home with a built-in contingency that you must close escrow concurrently with the home you will be buying. That way if you don't find your next dream home at the price you want then you don't have to sell. Now there's a lot of factors involved with selling your on a contingency basis so please consult a seasoned real estate professional for more details.