Here's Why It Could Really Pay to Downsize Your Home This Summer
- Right now, the demand for homes is strong.
- That could change as mortgage rates rise and recession fears mount.
It's an option to jump on ASAP.
For many months now, sellers have had a clear upper hand in the housing market. That's because real estate inventory has lacked in a very big way, and buyers have been desperate to scoop up what limited properties have been listed.
If you've been thinking of downsizing your home, you may want to look at putting it on the market within the next month or two. If you wait too long, you might lose out on the chance to maximize your profits.
Why sellers could gradually lose their edge
Right now, home-buyer demand is quite strong, even though home prices are through the roof. But that could change in the coming months.
For one thing, the Federal Reserve still plans to move forward with interest rate hikes. That could influence mortgage rates, which have already jumped substantially since the start of the year.
If borrowing gets more expensive, it could lead to buyer pullback. And that could leave sellers with less negotiating power.
Plus, at this point, a lot of financial experts are warning that a recession could hit later this year or early next. And that's apt to spook buyers to some degree. It could, in fact, lead to a situation where home-buyer demand drops due to economic fears, resulting in less bargaining power for sellers.
That's why it pays to get moving now if you're looking to downsize your home. Based on the current state of the market, you might manage to command a great price for your home -- so much so that you're able to buy a smaller home outright without having to take out a mortgage. But if you wait too long, you could get stuck with a lower sale price.
Should you sell a home on your own?
Because buyer demand is so strong these days, you may be inclined to skip the real estate agent and sell your home on your own. But doing so could mean losing out on a larger profit and enduring stressful negotiations.
The good thing about hiring a real estate agent is getting that person's expertise to guide you along. An agent can help you find the right price for your home and negotiate with potential buyers. If you end up with multiple offers on your home, a real estate agent can help you navigate them and select the right one. And if you encounter hiccups after accepting an offer (such as a seller who decides they want to back out), an agent can guide you through that process.
All told, it could really work to your benefit to hire a real estate agent to help you sell a larger property you replace with a smaller one. And remember, if you're buying and then selling, your agent can represent you as a buyer at no cost to you.
But if you're serious about downsizing your home, don't delay. We don't know how long the housing market will stay the way it is today, and the longer you wait, the more of a risk you take.
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