Make That Move You Want to Make

May 5, 2015 | Buying

Situation: You’re not relocating out of metro Denver (Yea!) but you need to make a move. You may be a growing family that needs more space. You may be an empty nester that wants to downsize. You may need to change your geographic location due to jobs or schools.

The elephant in the room, however, is the fear of being homeless. From all the stories you’ve heard, you imagine it will be easy to sell your current house … perhaps too easy. And that’s the rub. Will you be able to find the replacement property that you want?

It’s a valid concern. At the same time, there are (1) Good reasons to make the move now and (2) Strategies that will allow you to be successful. Let’s look at both of those items.

The reasons to get into that property you really want are numerous:

No Perfect Time: When you need to move within a given city/real estate market, you will always face challenges. If it is a seller’s market, you’ll worry about being homeless because it’s harder to find what you want. In a buyer’s market, you’ll worry about ending up with two houses since it can take a long time to sell your current place. There is just no perfect time to move up or move down or move around from a market point of view. If you wait for optimal conditions, you’ll most likely die in your current property.

Low Interest Rates: Unless you’re Rip Van Winkle and have slept through the last few years, you’ve probably refinanced the loan on your current home at a nice, low rate. Well, rates have not gone up. Interest rates are just as low right now as they’ve been in the past few years. As a result, you’ll probably get an interest rate on your replacement home that is just as good, or very close to, your current interest rate. This may not be true later this year. Rates are expected to start climbing soon.

Tax Advantages: Many people are unaware that current tax laws let you sell your current house and pay absolutely no federal or state income tax on the capital gain! We don’t have space to give you all the IRS regs, but the basic rule is that you can sell a primary residence you’ve owned for at least two years and not pay any income tax on the first $250,000 of capital gains, if single, and that increases to $500,000 if you are married and file a joint return. Plus, you don’t have to reinvest that money in the next house! You can use part of it for the down payment on the next place and the remainder can go to take care of other needs – all with no money going to Uncle Sam.

Here are some strategies we are using at CHR to help people make that move they want to make in the current market conditions:

Buy First; Then Sell: A large number of people have the wherewithal to buy the replacement house first and then sell the current property. This is ideal. You lock in the price on the next home as soon as possible and know you’ll quickly be rid of the current home. It’s worth exploring this option first – you might be surprised at what is possible.

Contingency: Since it is a seller’s market, we have negotiating leverage. We can often get a buyer to give you a contingency to find another home. If that home is not found within a certain number of days or weeks, you can cancel the contract to sell your home and do so with no penalty. Viola – we can usually find the next place in the time frame granted by the buyer and you are guaranteed to not be homeless.

Delayed Closing and Possession: We can get the buyer to wait up to 60 days to close. The buyer also allows you to stay in your house for up to 60 days after closing. This gives us four months to make the replacement home happen.

Temporary Move: Often considered undesirable, this strategy can be a good one, especially if you are single or married with no kids or pets to worry about at the moment. We have even identified places where you can do a short-term rental and “camp out” while we are finding just the right replacement property for you.

Don’t let fears about current market conditions keep you from making the move you want to make.

We’ve got solutions.

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