Got an email from an agent with a cool message I’ve been shouting about for years….Here’s Kirsty Drummond…you can connect with her at www.facebook.com/SoldByKirsty
(plus I’ll add my two bobs at the end) over to Kirsty…..
Everybody wants to get the best deal when buying and selling a property, it’s only natural, if you can save $5,000, that could pay for that fabulous vacation in Bali which it seems you can never afford!
However, too many people, actually spend more money by waiting for a stronger market to sell their home, forgetting that they then need to buy their next home in that same high market! Many investors, especially first home owners, also hold off on buying in down markets because they follow the fear of investing that is portrayed in the media.
There is no denying that the property market has taken a battering over the past two years, however as a very wise man once told me “a good investor knows that the best time to make money in property is in a down market.”
You’re probably thinking “of course she would say that, she’s a real estate agent, and agents always say ‘now is the best time to buy’.” Well, how about I show you why instead:
If you are looking to upgrade, when you sell and buy simultaneously in a down market, you’ll be ahead of the game because the price reduction on the purchase is greater than the loss on the sale.
First, consider the “Loss” on Selling Your Present Home
As an example, say your present house is worth $300,000, but due to the current market conditions, you must reduce your price by 10%. So, instead of selling for $300,000, you sell for $270,000 and in turn “lose” $30,000.
Second, consider the “Savings” on Buying Your New Home
If you are planning to move up to let’s say a $500,000 house, in the same market conditions, you could probably buy that house with that same 10% discount or for $450,000. This would mean you had saved $50,000.
Review of Selling and Buying Numbers
1. So you “lost” $30,000 on the sale of your home
2. But you “made” $50,000 on the purchase of your new home
YOU’VE JUST SAVED $20,000!!!
Glenn Twiddle’s comments.
Couldn’t have said it better Kirsty. The one thing I’ll add is you didn’t account for skill differential. You assumed buying and selling from the same skill of agent.
If your hypothetical buyer/seller strategically chooses a great agent like yourself, or countless others like Chris Gilmour, Mat Steinwede, Amber Werchon, Edgar Natolo, Michael Spillane….and the list goes on….. then imagine they sold having to only drop..say 5% in this market, and they bought through an agent with one foot out the door and willing to do anything to get a sale, they might be able to get a 20% off on their purchase.
So buying now is a GREAT idea, and I have just done it. Bought a bigger, better, newer house on a bigger block of land AND I WAS PAID A PROFIT to do so !!
Great article and thanks for contributing Kirsty
