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Are Sellers Crazy Not to Sell Now?

With real estate prices on the rise and multiple-offers the norm in many markets, are sellers crazy not to sell now?

Yes.

And No.

• If this is the right time to cash in your real estate investment, accurately crunching the numbers with your real estate professional will confirm that selling is the right thing.

• If this is not the right time to let go of your home to achieve another goal, it doesn’t mean that later may not be ideal. Real estate professionals are geared up to sell real estate now, so deciding on the actual timing of your sale is up to you. Deciding when to sell should be based on your personal criteria, not the professional’s. Compare what would make selling now right for you with reasons offered by real estate professionals as proof that this is the right time. Is there a fit or not?

Even when broad trends sweep through the real estate industry and across the country, it’s still all about what you—as an individual or as part of a couple or a family—can and want to do with your specific property or real estate dream.

The fact is you won’t know in advance whether either selling now or not selling now is positively the best move. “Experts” may say they know or sound like they know, but they understand less than you do about what’s right for you.

At some point after the sale, you may look back on what happened and decide that was either the right thing to do or the wrong thing. Hindsight is 20:20 in real estate, but by then it’s too late.

Not acting because of indecision or fear is not the answer either.

Over the years, I have met hundreds of people who each told their “if only I’d…” real estate story about what they could have bought or sold, but hesitated. None of them could forget about what they had lost or could have gained, real or imagined.

So how do you decide when to act and when to wait?

That’s the challenge—and that is also a very individual thing.

We’ve all got our own decision-making and investing style, whether we are conscious of these approaches or not. All we can do is keep improving both, so that we make confident, knowledgeable decisions about when to invest and when to take profit.

Three Key Contexts for Deciding If Now Is The Right Time to Sell:
#1. Ignore what’s hyped in the media and focus on facts about the real estate market in your neighborhood.

Go over your listing options with two or three real estate brokerages. Select local real estate professionals who have experience with multiple-offer markets if that’s what’s happening in your area.

Ask a lot of questions. Listen carefully to answers and ask “Why?” a lot. Take notes so you can compare their different analyses of your situation and options.

Don’t just go with the highest bidder. If they are wrong, you’re the one who will suffer. Merely listing under market value to attract multiple offers does not guarantee the seller nets more than they would by listing at market value. Solid marketing strategies and professional substance are what make the difference in real estate.

Nor are you out to make new friends. Stay skeptical. Your sale may just be another deal for the professionals involved, but your real estate represents great value in your life. Perhaps it’s the driver of your entire financial future.

#2. After the sale, what’s next?
Invest just as much time and effort in deciding what you’ll do with the cash after you sell. Will you rent? Where will you live next if you decide to buy another home? Are market conditions there going to limit your choices?

• Cashing Out: Low interest rates make putting cash in the bank a financially unattractive prospect, so what’s your plan to grow that capital or at least protect it? Do you have a financial advisor you can really trust or is this DIY investing? The home equity or value that took decades to accumulate can disappear very quickly if you are not experienced at managing lump sums or you trust the wrong financial advisor.

• Buying In: If you are going to switch from seller to buyer in a similar hot sellers market, you may discover that much or all of what you gain by selling can disappear into your next real estate purchase. If that proves true, but you have improved your location and/or made a great lifestyle choice, that financial equilibrium may be acceptable. However, if you end up with less than you had and you’re not happy about that, this may have been an expensive real estate lesson.

#3. If you’re wrong, what’s easier to live with?
It’s your choice. What would be easier to live with? Regret that you could have taken profit out now, but did not, or regret that you gave up your home, but did not improve your financial well-being?

That’s where many real estate owners—sellers—are today. They ask themselves, “Will I look back on this time and say I was crazy to sell or that I was crazy not to sell?”

The smart ones don’t just wonder or end up whining “if only.”

They commit to exploring their options and getting the facts to discover exactly where their best future might lie.

Saving for a Down Payment When You Live Paycheck-to-Paycheck

A down payment is an important component of taking a step toward homeownership. Saving for a down payment is also the biggest obstacle that you probably face when you want to buy a home.

A down payment is the cash you pay upfront when you’re going to make a large purchase. If you were going to buy a $350,000 home with a 10% down payment, you’d need to have $35,000 in cash.

Then, your mortgage lender provides the rest of the money to buy the home, and you pay your lender back over time. There are a few exceptions to lenders requiring a down payment, such as VA loans, but generally, it is required.

It’s recommended that you put at least 20% down if you’re going to buy a house, but that can be a lot of money.

How do you save if you’re living paycheck-to-paycheck? It is possible, but you also might have to make some changes.

Take the First Step
Even though you might feel overwhelmed about the prospect of saving money when you’re barely making ends meet, just take one first step toward your goal. That step may be small or almost symbolic, but it’s the best way to get started.

One good first step is to open a savings account where you’ll deposit money that’s specifically meant to go toward your down payment.

You might want a savings account that pays a bit of interest as well.

Create a Budget
You may be in a cycle of living paycheck-to-paycheck that you don’t necessarily have to be in.

If you can drill down into what’s going out versus what’s coming in, you might find that there are some ways you can save money even on your current income.

Really taking an honest look at your income versus your spending can be challenging and overwhelming because you may not realize how much you’re spending on things that you don’t need to be. Doing it is rewarding and valuable, though.

When you create a budget, include in it money that you’re going to set aside every week or month that will go toward your down payment.

Even small contributions do add up over time if you’re consistent and patient.

If you’re not sure where to start with your budget, a lot of financial professionals recommend following what’s called the 50/30/20 rule. This means that 50% of your income goes toward your essentials, such as your rent. Thirty percent goes toward lifestyle-related expenses, like eating at restaurants. The other 20% should either go toward savings or paying off debt.

Cut Out Subscriptions
One of the best things you can do for your finances is to regularly evaluate what subscription fees you’re paying and cut them out. It sounds simple, but the reality is if you’re like the average American, you might be spending $237 a month on subscriptions. That’s a lot of money that could go elsewhere.

Go Over Every Bill Carefully
When you’re working with a relatively small amount of income compared to your expenses, you should go over every single bill and transaction carefully.

There are a few reasons for this.

First, you want to make sure there aren’t mistakes you’re paying for. You might also find ways to pay less. For example, you could ask for a lower rate on your credit cards if you have a history of on-time payments, or you might be able to talk to your car insurance company about good driver discounts.

There are a lot of opportunities to save money on your bills, if you know where to look at you’re willing to ask.

Add Income
Finally, once your budget is in order, it’s a good idea to add extra income to your life. There are so many ways to do this. When you’re not working your full-time job, maybe you deliver groceries or work for a rideshare service.

It doesn’t matter what it is, but when you add another stream of income, it puts you that much closer to your down payment.

Everything you earn from your secondary income source should go directly into your down payment savings account, so you aren’t tempted to use it on anything else.

Position Realty
Office: 480-213-5251

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