Find and buy your dream home?
You are not in your dream home. So. Should you sell your present home (and take the loss), in order to buy another home (taking advantage of today’s low prices) in a better neighborhood and better suited to your needs?
Miami Dade County Real Estate
“That’s the advice I gave my son,” said Oliver Ruiz, managing broker for Fortune International in Miami. “He wasn’t a parent when he purchased his small condo in the Brickell area. Now he has two small sons.” Although, the condo has dropped in value significantly (by $80,000), his son, Oliver A. Ruiz, can get a good deal on a single family home, now, Ruiz points out.
His son lives in an older building, which has some advantages: larger rooms and a strong association. But new condominiums are inexpensive and plentiful, have a modern flair and offer amenities. In a normal market and with a price $80,000 less than the purchase price of $267,000, his son’s unit would sell in less than 30 days, Ruiz said. “Now, it will take longer. He would have to be competitive, price it right and stay on his toes.”
Broward Real Estate
Jesse Acevedo, broker manager for ERA Ace Realty in Fort Lauderdale said, “Look around. See if a home you like in a better area is out there.”
For those with decent credit and equity, it’s a good choice to take the loss on a current home and use the money to purchase a better property, he advises. “When the market switches around, your new property will gain value a lot faster.”
Real estate has always been a long-term investment, he said. “At this point, it will take 10 years to break even. A lot of people don’t want to waste time building back equity in a house they don’t want.”
Buying a new home, while renting the old home and keeping it as an investment, is a more typical scenario, he said. But for those who want to downsize or trade up, it’s ok to sell, take the loss, and move the equity into a better home. “They will make it up on a new property. “It’s a swap. Even Stevens.”
Palm Beach County Real Estate
But, bear in mind, there’s no need to hurry, either.
Don’t make a hasty move, advises Christine Franks, owner broker of Wilshire International Realty Co. in Palm Beach.
The days of 20 percent increases a year on home values are over, she said, and once the market bottoms out, home values will go up the traditional 1 to 5 percentage points a year. “Even as prices bottom out and begin to go up again, it still will not be too late to take advantage of low home prices.
“Rushing is never good. That’s what happened in 2005,” she said. “But it’s good advice to start looking around.”
Stay informed and see what’s available. Look at the price of the home you are considering. Take into account how long the house has been on the market, the original asking price and the current asking price. “Do the legwork necessary to make an informed decision,” she advises.
A twist on the renting angle might be worth thinking about, too.
What about Oliver A.? Did he follow his father’s advice? Well, no, acknowledges the elder Oliver, and, in retrospect, he believes his son made the right decision. “My son has fine credit, but only put 20 or 30 percent down, so he’s a little under water. He will probably rent his condo and rent a house for his family for a little while, until he rebuilds some equity.”