Property Blog by Chris Gray from Your Empire - Would you Gamble your family Home?
Recently, I received this question via email;
Hi Chris,
Our family is looking to move house (time for a change), and I was wondering what you would recommend is the best time to sell and buy in the current market?
Janet H.
With Janet's approval, I thought it might be good to share my thoughts on the topic.
First off it's important to note that no matter what the current market, or economic climate, people will always have a need to trade real estate (even though my strategy is always to "buy and hold").
Before you sell any property, there are serious considerations:
Selling costs
Buying costs
Time
Stress
Costs include:
Real estate agent fees
Marketing
Stamp duty
Reports
Legal fees
Buyer's agent fees
Plus more
It's most important not to overlook the time and stress involved though. Yes, you absolutely should have a buyer's agent help in this process, though it's natural to be stressed when you are making some of the biggest financial decisions in your life.
Though let's imagine that you have weighed up the pro's and con's and you have decided that you absolutely must sell your current family home now and buy a new one.
Ok. If that's the case, my next question is...
Do you like to gamble high stakes?
If you answered (like most people would) NO, then here's what you need to consider.
If you are selling and buying in the same (or similar) market, then you should make both transactions as close to each other as possible.
Why?
Because in any market:
Rising
Falling
Flat
Booming
Busting
If you sell and buy at the same time, you are selling and buying into a market that is (generally speaking) "like for like".
Yes, I understand there are specific circumstances where this can only be part of the story, like if you are selling an apartment and buying a house, or if you are moving to a new area, though for the purpose of this discussion, let's stick with the "like for like" analogy.
The moment you try to "time the market", you roll the dice.
Sure, some people win and the market falls before they buy again, though given there are absolutely no signals as to when (or how much) a market can turn and rapidly rise, you could end up with the money from your sale and watch it rapidly become less valuable in the market you are looking to buy.
Keep in mind that for many decades, the long-term movement of property prices has been "up", so if you gamble on a market falling, you're actually betting against a historical average. It doesn't sound like a good bet to me, especially if you are putting your family home on the line.
If you buy back into a market as quickly as you can, then you take far less risk and you are a much greater chance of entering back into the same market that you left with no net loss.
The entire process can get seriously complex if you try to sell and buy into the same market. If you need help, we're here.
Got questions? Reply to this email or grab your free 15 minute strategy session with Luis and we'll ensure you are pointed in the right direction.
Chris Gray - Your Empire.
PS. Although I own roughly $20m worth of property, I have never owned my own home. If you're wondering why, you can watch this video from when I was interviewed on Studio 10.
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