I have just finished the process of buying and selling a home in the present 2009 recession and have found in this economic downturn with the new rules in banking and loan offers, there is a lot that is different these days and important things to know.
The first step in selling a home is to get prepared for some emotional as well as financial changes. Everyone knows these days that homes aren’t selling either at the rate or the prices they did two years ago. So a seller needs to understand that pricing right is very important. Pricing right doesn’t mean how your neighbors are pricing their homes, because they may be priced too high at the outset; and a property therefore remains on the market longer than expected. Pricing right means finding what properties have sold for with the same physical characteristics as your home and the same general geographic location.
The emotional changes in selling a home also means the feelings of letting go are likely to be stronger than they were two years ago. The reason for this is the fact more money has often been invested, sometimes with the expectation this would be a major nest egg. Finding out that nest egg has shrunk considerably can be bad news and painful to find out. So there are bound to be days of grieving following a real estate sale these days.
On the buy side of real estate, those getting homes these days are finding they are more affordable than they once were, so when you buy another home, you will usually be gaining back much of your own loss from the extra you will get at a lower price than you likely paid for the home you just sold. In our case, my husband and I sold a beautiful condominium in Hawaii for $106,000. This seems low, and it certainly was for us since we had invested 50 to 70% more originally for the property more than 10 years ago. Still the condo was 35 miles in the country from Honolulu, with a maintenance fee of nearly $600/month and along a road that now involves a treacherous drive through an area with very high crime rates and traffic so congested that 35 miles of driving can take more than two full hours. However, after considerable shopping we found a property in Oregon, after sale prices had dipped considerably and someone with illness needed to sell quickly, of equal price with twice as much space and amenities. Our loss translated into a win.
The new market also means that buyers and sellers now have more opportunity than they had before to make personal transactions. Banks now ask 20% down and documented income and are firm about the details. Individuals, however, can be more flexible; and many people have properties to sell where they can make excellent conditions. A property we sold is ideal for a business couple, and as seniors we needed to downsize. Since we owned the property free and clear, we are able to carry the note. Seniors need regular income, and this provides it. The sale also helped us avoid closing costs and the buyer those costs as well. It also means we get the interest normally paid a bank, and the young couple don’t have to liquidate business assets in order to purchase the home.
When you buy and sell a home these days, as a customer, you will find at the end, that if you are able to buy again fairly quickly, your losses might be less than you noticed at the time you sold your home. Your loss is someone’s gain at the time, but then your gain on another piece of property may offset that.
It isn’t easy to recover from financial losses these days, but everyone these days is having to deal with the losses. It means that old adage about keeping up with the Joneses doesn’t seem relevant any more in real estate, and maybe that’s a good thing after all. Winning with simplicity may be the better way for everyone.