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Usually, most home owners would sell their current property and upgrade to a bigger property in a rising market. This is not unusually where most home owners would be better off financially in a rising economy. But do you know? You will be better off upgrading to a bigger property in a failing market instead?
Say if you plan to sell your $1 million property with the intention to upgrade to a $2 million property. A 10% increase in both properties mean that your $1 million property will increases to $1.1 million and that $2 million purchase will increase to $2.2 million instead.
You could be thinking that you stand to profit $100,000 from your selling. But you may have to pay up to $200,000 more when you purchase. Hence, you stand to pay $100,000 MORE in a rising market!
Alternatively, if you plan to sell your $1 million property in a down market. A 10% decrease in both properties mean that your $1 million property will decrease to $0.9 million and that $2 million purchase will decrease to $1.8 million instead.
A 10% decrease in both properties mean that you could lose $100,000 when you sell. However, you also stand to pay $200,000 less when you purchase. Hence, you stand to pay $100,000 LESS in a failing market.
Given that stamp fees and agent commission are based on a percentage of the property prices, the lower the price the less you pay too.
Give me a call today if you have plans to upgrade in a down market.
