The real estate market across the country is booming right now. Many major metropolitan areas are seeing a great influx of buyers, which makes sellers a lot more money when selling. But is there a downside to a seller’s market?
If you’re planning on buying another house after you sell this is where the disadvantage of this type of market comes in. It might be more difficult to find a house and purchase a house after selling. Sure, it might be great to sell and you’ll get top dollar, but it might also mean that you will be paying top dollar for the next home you choose.
If you’re looking to buy in the same neighborhood and you know that it is a hot community, you might plan when to sell and when to buy and it might not be the same time. You could end up spending all the money that you have recently gained from the sale of your property into a new home. While it might not be a big deal to a lot of people, if the market happens to drop, you may now more on your home that it is worth.
[Additional Resource: The Anatomy of The Purchase and Sale Contract]
Purchasing a home at the peak of a seller’s market is not really the best strategy even though you want buyers to purchase your home at this time. Liquidating your real estate holdings in a hot market and moving into a rental home might make better financial sense even though you will have to move twice. You need to weigh the costs of moving, rental fees, and the time you could be giving up in a new house against paying more for a home that might not be worth as much in a year or two.
It is always a risk. Will prices continue to rise? Probably. But it might be better just to wait 6 to 12 months in the rental market before purchasing. Selling at the peak of the market during the best time of the year, that would be spring and summer and then wait until late fall or winter to buy. Your options might not be as vast but you probably will not be spending as much money on a similar home either.
You also have to think about the additional costs that come with buying a home that might be more expensive. Not only will you have a higher mortgage but your property tax and homeowners insurance could increase with a higher priced property as well.
We’ve talked to a lot of sellers that want to cash in on the seller’s market but are nervous to do so because of the risk of buying at the peak of the market as well. Rental options become such a good choice because you can move into a rental property for a year or two, continue paying your monthly housing expenses and because you won’t have to worry about home maintenance, save some of that money for a down payment and reinvest at a different time.
Don’t be scared about selling if you really want to sell and gain as much profit from the sale as possible. If you’re looking to sell anywhere Northern Virginia, DC Metro area or Maryland contact one of our offices today. We have agents throughout the region and we can offer you ideal tips for today’s buyers and how to price your home correctly.