BUY Low and SELL High!

We all seem to forget that in a slow - or "off" real estate market - that home owners are just taking a "paper loss" on the valuation of their Highlands Ranch, Littleton or other Denver real estate...very similar to if your 401k or stock/mutual fund portfolio decreased because the stock market was going through a down period. Should you worry?

In the stock market or with your 401k, you can sell - or shift your allocations to other more profitable; or safe fixed options instead. If you don't sell, then you can just "ride out" the bad times and let your stocks go back up; thus the term "on paper loss", as in it looks bad on paper now, but it should recover in a short while.

In real estate, you do the exact same thing. Unless you really MUST sell your home for a job, other relocation, or buy a bigger or smaller house - then right now many of you are taking a paper loss on your home. It costs you NOTHING to incur a paper loss. Your exact same model of home down the street may have sold for $25,000 below the value you "thought" yours used to be worth...but does that really matter? Sure it stinks to take a paper loss, but what does it REALLY cost you - unless you ABSOLUTELY need to sell now? What?

In this professional Realtors opinion, you have 2 clear choices to consider...

1. OPPORTUNITY COST/OPPORTUNITY
Many 'half-empty' glass people forget that you are not being forced at gun point to keep living in your current house. You have an excellent - yes excellent - opportunity to "bail" on your current house and buy another one that's: bigger, smaller, closer to work, closer to an area you like much better, closer to recreational interests, in a nicer neighborhood, in the mountains, closer to your parents or in-laws - or in a better school system for your kids.

If you "bail" on your house now, you will INCUR the paper loss as a reality cost - as you will clearly make LESS money on your house by selling now - right? BUT DON'T FORGET THIS - you will also GAIN the peace of mind that you got a better house in the different area or price range you really wanted AND you will be buying that house for BELOW MARKET PRICING too!!! This is what economists call an "opportunity cost" - where you lose $25,000 on your current house but you get a $25,000 (or MORE!) favorable exchange when you buy another house below market value.

Savvy and smart buyers see the HUGE opportunity to move-up to a much more expensive house right now, as you many be able to purchase that home for $25,000 to $75,000 BELOW the regular market price; thus the excellent "opportunity" to make a financial GAIN in a slow real estate market. It's a rather genius way to really make a profit now, by the old adage of "buy low and sell high".

2. CUT YOUR LOSSES
If your present home is too expensive, too small, too big, bad neighborhood or neighbors, schools aren't good, you're commuting too far to work - or what ever you "dislike or hate" - then perhaps you need to CUT YOUR LOSSES now and make a move somewhere you like better. If you are downsizing to a less expensive or smaller house, you will probably LOSE MONEY by selling your current house and getting a smaller house, as you might not be able to 'recoup' the trade-down value; i.e. - you'll buy a less expensive home for only $12,000 below market, but you're selling your house at $25,000 below market. Make sense?

But, if your arm is bleeding, how much longer are you going to wait to go to the emergency room? Sometimes the BEST opportunity is to "cut your losses" and move on to a better opportunity that makes you happier in the long run! Moving closer to your job, saving driving and commuting time, getting a better - moving to a nicer area makes most people MUCH HAPPIER - and there is no amount of money you can put aside for getting "happier" or "more sanity" in your life...right?

I know of people who have moved just to get their kids into a better scholastically rated - or better sports program high school - while the kids were still in elementary or middle school.; so the transition would be easier for the kids to adjust and make new friends. I know several people who have sold homes to "move-up" to nicer neighborhoods and much closer to work/jobs.

From an economic standpoint, does this help to explain why "now" many be the best opportunity for you to list your house for sale - and purchase another one? Let me know if I can help you sell or purchase your next home? We are now offering the new hybrid Home Ownership Accelerator Loan that helps you pay off your home in only 5-12 years, for homeowners wanting to get their homes paid off faster as you approach retirement age.

Don't miss my next topic - remodeling and updating mistakes that cost you dearly!