Sellers, don't pay up to downsize

Selling

Sellers, don't pay up to downsize

This seems to be happening to more and more sellers so I thought I would examine the reasons why. There are two main factors at play here and being aware of both of them can minimize this possibility.

The first is looking at how one level townhomes or Rambler style townhomes are affected by the current real estate market. Because of the increasing probability of class-action lawsuits towards the builders on the ninth year out of 10 years of the structural warranty. Combine that with the shrinking profit margins, builders are moving more towards two-story single-family homes that have the maximum amount of profit for them. What this means is even though the baby boomer generation is retiring, I don't believe you will see a huge increase in one level townhomes. Understanding this puts you ahead of the competition with regards to how you purchase a home. To minimize the impact of this piece, when you find a really good property at a good price you need to move forward and write an offer on that property to avoid multiple offers.

The other part of this equation is the sale of your home. If you've lived in your home for more than 20 years, think back to why you purchase the home in the first place. Many sellers will say it's because it was new, had all the features we wanted and probably fit my family and our lifestyle. You have to be aware that that part hasn't changed and that the younger buyers looking for your home are viewing things the same way. You have to update your home and have it staged to be able to compete with new construction. If you don't invest a few dollars to get a larger return on the sale of your home, you will end up with a shortage in many cases between what you sold your home for and what you need to purchase that one level townhome for. Sometimes it does not take a lot of money in staging and updates to maximize the sale price of the home you are going to sell.

A good rule of thumb is come up with a plan, work out all the scenarios with your real estate agent and put your plan into action. You have to understand the current market you're in and what your competitors are doing so that you can be successful with your move.