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Answers (11)
- Reema Sharma, "ReemaSharma"
- Contributions:927
I don't see how can go wrong with either decision, just about preference
- Bert Pope, "bertpope"
- Contributions:66
The 600-800 is still a tough market in most cities.
Try something I've had success in, literally trading your home.
Here is how it works: I buy yours, you buy mine.
There are many folks that need to down size thier position for many reasons. Going from a 600-800k home down to a 350k home would work nicely for many needy sellers. Just look at what you like and see if that is an option.
Most times you are able to squeeze out more equity.
Try something I've had success in, literally trading your home.
Here is how it works: I buy yours, you buy mine.
There are many folks that need to down size thier position for many reasons. Going from a 600-800k home down to a 350k home would work nicely for many needy sellers. Just look at what you like and see if that is an option.
Most times you are able to squeeze out more equity.
- DieselWMB
- Contributions:3
Thank you all for such thoughtful, and helpful responses! I've taken all of your advice to heart, and after some additional research and consideration, we are moving forward with listing our home and seeking out a new property.
Big factors for our decision include the apparent stabilization of the areas we're looking at versus what appears to be continued correction in our current area. After additional research, we also determined that the schools in our current area aren't the best while the ones in the area we're looking at are some of the best in the state. And who can beat these interest rates? My current rate is 5.5% (non-jumbo), yet I've been approved for a jumbo loan at 4.5%.
So now begins the tedious and arduous task of selling our current home! We're trying to get it on the market soon given the great weather we're having so that we can "beat the rush" of the spring season. Wish us luck!
Big factors for our decision include the apparent stabilization of the areas we're looking at versus what appears to be continued correction in our current area. After additional research, we also determined that the schools in our current area aren't the best while the ones in the area we're looking at are some of the best in the state. And who can beat these interest rates? My current rate is 5.5% (non-jumbo), yet I've been approved for a jumbo loan at 4.5%.
So now begins the tedious and arduous task of selling our current home! We're trying to get it on the market soon given the great weather we're having so that we can "beat the rush" of the spring season. Wish us luck!
- Paul Weisz, "Paul Weisz"
- Contributions:21
I believe your answer can best be found by consulting a local qualified Real Estate professional in the area you currently live. Where I do the majority of my work there is still some uncertainty with pricing and which direction they will head. However I am working with investors that are making purchases within 50-100 miles in areas where prices seem to have leveled off or are begining to rise. I agree with the comment below that appraised value and market value are often very different things. In my community it makes a huge difference just depending upon your neighborhood and the demand for certain types of homes.
The other part of this conversation needs to take into consideration both your families needs/long term goals as well as your most educated guess as to future appreciation. With regard to future appreciation I personally believe you have to ask yourself how much you think your home might appreciate over the next 5 years. Will RE in your neighborhood appreciate 2% per year? 5% per year? or will it continue to decline? How does it compare to where you might move? Careful consideration of these questions will help the two of you decide upon future direction.
- Wes Black
- Contributions:509
I would sell now and bargain hard when you buy.
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
Appraisal market could be far different then fair market value in todays market. "Trading up" is actually very rare. It can sometimes happen in a good market when you overprice your home and the market catches up to the inflated price and the house you buy for whatever reason has not sold and has a price thats a little old and undervalued. In this downward market... very very hard to trade up without expense.
- Mack McCoy
- Contributions:1117
Well, I wouldn't play the guessing game on where the market might be.
Expanding isn't easy - almost always, you create a home with serious floor plan and traffic defects. For example, the kitchen, dining room, living room, formal entry, and parking situations are usually different for a two-bedroom home than they are for a five-bedroom home.
You seem to have enough buying power that you'd be able to find something that really fits your needs. This is unusual; in my experience, people have a crossover where they can afford to put a certain amount of money into their existing house or buy another one that doesn't quite satisfy their requirements.
In your case, you seem like a home buyer. Go buy a new home.
All the best,
Expanding isn't easy - almost always, you create a home with serious floor plan and traffic defects. For example, the kitchen, dining room, living room, formal entry, and parking situations are usually different for a two-bedroom home than they are for a five-bedroom home.
You seem to have enough buying power that you'd be able to find something that really fits your needs. This is unusual; in my experience, people have a crossover where they can afford to put a certain amount of money into their existing house or buy another one that doesn't quite satisfy their requirements.
In your case, you seem like a home buyer. Go buy a new home.
All the best,
- Frieda Triebel, "Frieda Triebel"
- Contributions:234
Is your current home similar to the homes that surround you in your community? If so, and you add onto your current home, you may be over-improving for the neighborhood. On the other hand, if you are the smallest or lowest priced home in the area, it may be an advantage for you to add onto your current home. I suggest you contact a local, full-time, experienced agent to give you a market value opinion of your home, to show you a few trade-up homes, then look at your new projected mortgage payments. You'll also need an idea of a contractor's prices to add onto your current home if you are not over-improving for the neighborhood.
- sunnyview
- Contributions:25139
Although I hear your need for more space, I would not build onto your current house. People that I have seen do that often price themselves out of the neighborhood and end up with a house that is hard to sell later.
You can look for a move up house and the low rates will benefit you, but houses in my area that are 500K+ are not appreciating better at all. Ask an agent how they are doing in your area. Many times moving up to the middle plus at the bottom of a nicer neighborhood over a starter house can be better long term, but moving higher than that limits the number of buyers when you go to sell. That is even more true if rates move higher.
I would talk to your agent, but keep an eye on how the changing market will impact the house you buy. A better house with more space might work fine, but make sure that you are not digging in too deep to move up.
You can look for a move up house and the low rates will benefit you, but houses in my area that are 500K+ are not appreciating better at all. Ask an agent how they are doing in your area. Many times moving up to the middle plus at the bottom of a nicer neighborhood over a starter house can be better long term, but moving higher than that limits the number of buyers when you go to sell. That is even more true if rates move higher.
I would talk to your agent, but keep an eye on how the changing market will impact the house you buy. A better house with more space might work fine, but make sure that you are not digging in too deep to move up.
- DieselWMB
- Contributions:3
Thanks for the response Margaret!
According to Zillow, my home is presently "on par" or slightly above the value of surrounding homes, which of course may be another reason not to further expand. I'm already concerned about continuing declining values in my area, and would prefer to "stem the bleeding" instead of contributing to it. That said, I have contacted my builder and he has confirmed that I do have additional capacity in my septic system to handle at least one additional bedroom, which should make the upgrade more palatable.
So it's clear that I won't wring much NET value out of my home upon a sale, but that has me further concerned about what I could expect should I continue to stay here. What if in 5 years, the value of my home moves very little yet the value of the homes we're looking at start to increase? I hear that homes in the $500K+ range are still falling in value, but not sure that's true in all markets is it? Where we're looking (Madison, CT area) values seem to be leveling off.
I am meeting with my lender and realtor this week to discuss further and come up with a strategy, but any and all additional thoughts & advice are certainly welcome!
According to Zillow, my home is presently "on par" or slightly above the value of surrounding homes, which of course may be another reason not to further expand. I'm already concerned about continuing declining values in my area, and would prefer to "stem the bleeding" instead of contributing to it. That said, I have contacted my builder and he has confirmed that I do have additional capacity in my septic system to handle at least one additional bedroom, which should make the upgrade more palatable.
So it's clear that I won't wring much NET value out of my home upon a sale, but that has me further concerned about what I could expect should I continue to stay here. What if in 5 years, the value of my home moves very little yet the value of the homes we're looking at start to increase? I hear that homes in the $500K+ range are still falling in value, but not sure that's true in all markets is it? Where we're looking (Madison, CT area) values seem to be leveling off.
I am meeting with my lender and realtor this week to discuss further and come up with a strategy, but any and all additional thoughts & advice are certainly welcome!
- Margaret Shea, "sheasellsrealty"
- Contributions:402
You don't say what the rest of the homes are like in your area, but it does not uusually pay to price yourself out of the neighborhood. If you really like where yyou live and can see yourself there for at least 3-5 years, you could add on, hhowever, I would take a good look at what is available on the market. Quite a few babyboomers are downsizing.
The other consideration is the size of your existing septic system, which I am betting you have as opposed to city sewer. Do you have enough capacity to add on another BR or 2 ?
As your family is expanding, does the location meet your needs in terms of assessibility to recreation, schools, transportation, etc.?
All the best!
The other consideration is the size of your existing septic system, which I am betting you have as opposed to city sewer. Do you have enough capacity to add on another BR or 2 ?
As your family is expanding, does the location meet your needs in terms of assessibility to recreation, schools, transportation, etc.?
All the best!
To Trade Up or Not to Trade Up?!
We just recently had our home appraised at $305K based on recent sales, which is still more than I owe (but not by much). According to Zillow, property values continue to decrease in my area, so I can't imagine waiting will do us any good. Some of the areas we're looking at for potential trade-up homes are actually increasing in value.
So the question is...does it make more sense to sell our house before it continues to devaluate and purchase a larger ($600-$800K) home in an appreciating area, or should we sit tight and just expand? Making very little money in a sale of our current home wouldn't help our down payment situation, but I still could likely come up with 20% without it.
Thoughts?!
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