It’s been 5 years and you still don’t have enough equity to sell - what now?
I meet with many sellers and the reality is, if you bought in the last five years and didn’t put at least 10% down – you many need to write a big check to sell. Don’t panic! First, understand that just because you have to write a check to sell doesn’t mean your home has lost value. Your home needs to appreciate about 10% to cover your purchase and sell transactional costs – and that hasn’t been the case in most areas in the last five years. Historically real estate has appreciated 2-3% a year so under “normal” circumstances it can take a good five years to break even.
Remember, real estate isn’t the ATM machine it used to be – instead it is a solid, steady, long term way to financial independence and growth. Purchase real estate you can afford to hold for the long haul and if you’re not sure how long you’re going to stay in a certain area – purchase something that can make a good rental. If your horizon is at least 3-5 years, in most cases it still make sense to buy particularly when you add the tax benefits to the equation.
If you’d like specifics about the transactional costs associated with selling or buying, call me and I’ll go over the particulars of your situation.
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