Q. I want to buy a home to take advantage of the low prices, high level of homes on the market and extremely low interest rates, but I have to sell my current home first. Considering the current market, should I wait until the market is better to sell and then buy?
A. It depends. Isn’t that the answer you wanted? It depends on the value of the home you own now and the home you will likely purchase. In as few words as possible, if you can sell your current home for a fair market value that is at least going to cover what you owe on it, then now is the best time to buy a home in the Dallas area. This is especially true if you are planning to buy a larger more expensive home.
Let’s assume that sellers are taking an average of 7% less than their asking price on well priced homes. If you are selling your $185,000 home, you might have to accept $172,050 and take the hit for $12,950. On the other hand, let’s say you plan to buy a home for $285,000 and you can get it for $265,050 (7% below asking) saving $19,950. You will have a net gain of a $7,000 discount on the new house if it were a normal market.
Clearly the math doesn’t work and the timing is not right if you owe more than your current home is worth, or if you happen to be planning to move to a less expensive home. There are of course hundreds of variables and scenarios where it would or would not make sense to sell and buy this year, but this is a common occurance.
Looking forward to Real Estate Q&A #2? Send us your questions…
BigDBlog
Tags: Big D Blog, buy a house, Dallas Real Estate, low interest rates, North East Dallas Housing Market, sell a house
