Some small investors starting to partner upCHICAGO – Feb. 20, 2018 – As property prices rise, smaller real estate investors are reportedly teaming up with others so they can afford their next
In A Sellers Market Is It Time To Downsize
A study by Edelman Berland reveals that 33% of homeowners who are contemplating selling their house in the near future are planning to scale down. Let’s look at a few reasons why this might make sense for many homeowners, as the majority of the country is currently experiencing a seller’s market.
In a recent blog, Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:
A smaller home means less space, but it also means less time, stress and money spent on upkeep.
Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.
Realtor.com also addressed downsizing in a recent article. They suggest that you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of their questions followed by their answers (in italics) and some additional information that could help.
Q: What kind of lifestyle do I want after I downsize?
A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.”
Comments: Many homeowners are taking the profit from the sale of their current home and splitting it in order to put down payments on a smaller home in their current location, as well as a vacation/retirement home where they plan to live when they retire.
This allows them to lock in the home price and mortgage interest rate at today’s values. This makes sense financially as both home prices and interest rates are projected to rise.
Q: Have I built up enough equity in my current home to make a profit?
A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”
Comments: A study by Fannie Mae revealed that only 37% of Americans believe that they have significant equity (> 20%) in their current home. In actuality, CoreLogic’s latest Equity Report revealed that 72.6% have greater than 20% equity. That equity could enable you to build the life you’ve always dreamt about.
If you are debating downsizing your home and want to evaluate the options you currently have, let's meet up so I can help guide you through the process.
Bill is a motivated realtor specializing with investors, new home buyers, and move up buyers located in the following areas;Anna Maria Bradenton Bradenton Beach Cortez Ellenton Englewood Holmes Beach Lakewood Ranch Lakewood Rch Longboat Key Myakka City Nokomis North Port North Venice Osprey Palmetto Parrish Sarasota Siesta Key Terra CeiaUniversity Park Venice and surrounding areas. If your a buyer check out our Buyers Advantage Program designed to protect the interest of our buyers at all cost. Bill Burg uses advanced internet marketing to insure your property gets maximum exposure and holds a high value of ethics in his work to ensure the ideal scenario for everyone! I am so confident in our ability to sell your home "I GUARANTEE it". Find out about Seller Guarantee. For help with buying or selling a property call 941-444-0010!
Hi, Bill is the founder of the Burg Realty Group and is licensed in 2 states and he is involved in business success coaching with businesses all across the United States. Helping them grow their bus....
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