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Taking Advantage of the “EQUITY GAP” in today’s 2009 Buyers Market!
Setting the Expectation of Selling and Buying
Whether you are a seller or a buyer, there are some obvious benefits to moving ahead with your long term Real Estate goals TODAY in 2009! The market has NEVER been so ripe for a great purchase as it is today. With an oversupply of homes to choose from, near record low rates on mortgages, and some amazing tax incentives, there is no question now is the time to buy.
I’ve been meeting with sellers in recent weeks who are considering entering their homes for sale in this strong buyers market, but they have some valid hesitation and fear.
This is very real, and totally understandable. The thing that sellers must come to understand in this market, is that they often need to compromise on their sale price in order to gain BIG on the buying end! There is possibly no better time in our lifetime to do this…
For this reason, I thought it would be helpful for my clients contemplating this exact situation, to see what other clients of mine have experienced: how they came out ahead (and that they lived to tell about it!) Their comments will follow.
It is my hope that with a combination of some savvy Real Estate experience and skills on my part to keep your homes selling for the most money in the shortest amount of time, YOU can buy in this market and GAIN BIG!!!
Examples of Total Net Gains Explained
| Client |
Years Owned |
Days on Market |
List to Sell % |
Net Gain/(Loss) on Sale |
“Buyers Market” Savings on new Home |
Total Net Gains |
| Dockside |
6 |
38 |
93 |
(-$10600) |
$51000 |
$40400 |
| Everson |
3 |
2 |
96 |
(-$2000) |
$56000 |
$54000 |
| Montgomery |
11 |
3 |
97 |
$60000 |
$48000 |
$108000 |
| Woodsview |
2.5 |
4 |
97 |
(-$11500) |
$30000 |
$18500 |
| Valley Trails |
6 |
8 |
97 |
$11679 |
$59000 |
$70679 |
This chart was created to be a quick glance at what my recent sellers-turned-buyers have GAINED on their transactions.
On the left you will see the properties, as they will be referred to in the sellers comments. In addition, I thought it would be helpful for people considering this scenario to realize that this GAP occurs when sellers have owned their homes for many years to very few years. Next, it is important to realize the low ‘Days on the Market’ that AmyBSells touts! This is important in making sure you get the AmyBSells average 97% of list price as seen on the third column. And, more important, gets you on the buying side sooner rather than later in this market with such great interest rates!
The Net Gain/(Loss) on the Sale compares the difference between the price paid for the house when that owner purchased it, and what it was ultimately sold for in 2009’s Buyers Market. As you can see, several losses, one narrow gain, and the home that was owned the longest time had the largest gain.
Then we show you the “Buyers Market” Savings on the new home. This column gives you an idea of the type of benefit these buyers got on their purchase in the 2009 Buyers Market, compared to what they would have paid in a better market just a year or so ago. As you can see, they all benefited from some amazing price differences, truly taking advantage of the Buyers Market on their turn.
When we take a look back at what these same buyers sold their homes for, the losses they took compared to the Gains they made by buying in the same market, we see that they ALL WON BIG, in the TOTAL NET GAIN area. This huge Net Gain, combined with their low interest rates, make for one of the best markets in history to buy, even if you have to sell.
Client Feedback from their experience
Take a second to read what these clients had to say about their experience after it was all over…
“My husband and I bought our first house in 2006 in a great neighborhood for young professionals. Two years later, our daughter was born, and we quickly outgrew our 2 bedroom, 1 bath starter home. We knew we’d need to buy a bigger house when we decided to have another child, and seriously weighed the pros and cons of moving now. We had bought our house at the top of the market, and after seeing the research and recent sales, Amy helped us to see that we could basically break even on our current house, based on comparable sales, etc. With interest rates what they are and home prices dropping in the area where we were looking (and a house we had already walked through and fell in love with), we decided to go ahead and put our house on the market. After a lot of preparation work on the house, we listed it with Amy and received an offer the next day. While we did end up bringing about $800 to the table to close on our current home after all was said and done, we were able to purchase the home we’d fallen in love with. We were able to negotiate a great deal on the new house, especially considering the neighborhood and price-point. Our final purchase price came in 50-60K less than the comparable home sales in our neighborhood from the past two years. Even though we are here to stay, we’ll certainly see a return on this house as soon as the market starts to spin. We couldn’t be happier with the decision we’ve made to sell and then buy in 2009! Even though the process was stressful and we didn’t want to pay money to sell our house, it couldn’t have gone any better for us on the buying end.” — Everson Clients
“Because of the type of new home we were looking for (contemporary), it became apparent that we needed to find a new home before we sold our current one. During those six months, the housing market turned considerably, and the amount of money we projected to make on the sale of the current house fell little by little each month. But, as the market changed for us as “sellers”, it also changed for us as “buyers”. As the months progressed, more homes came on the market that not only met our buying criteria but were more affordable, equipped with more amenities, and well within our initial purchasing budget. In the end, what we lost on the selling side was far exceeded by what we gained on the buying side.” –Montgomery Clients
“We knew that it wasn’t going to be profitable to sell our condo but we had several compelling reasons for moving including being closer to work, family and the impending birth of our first child. It was hard to sell our condo for $10,600 less then we paid for it almost a decade ago, but Amy helped us find a great deal on the house we bought. If we would have purchased the house 18 months ago we would have paid at least $50,000 more for it. When we take into account both transactions, we came out a little over 40K ahead and we are living in a beautiful house that suits the next stage of our life.” -Dockside Clients
“It was always our plan that the house we sold was our “starter” home. When we bought the house in 2003, our goal was to buy a bigger house in a better location when we had school-aged children. We didn’t think we’d be able to afford as much house as we are buying. We had totally ruled out building a new house because we thought we’d get more house for our money by buying an older home.
It definitely hurt to sell our home for less though. In 2007, there were two 3-bedroom ranches that sold on our street. One sold for $210,000, and the other for $212,500. Neither had finished basements. If we had sold at that time, we would have hoped to get about $215,000 for our home, so roughly $20,000 more than what we just sold it for.
So, in a nutshell, if we would have sold/bought the same houses 18 months ago–we probably would have sold our home for $215,000 and bought our new home for $325,000 (which is probably a very generous estimate–I think the same house would have cost much more). So, all that being said, there is NO WAY we would have been able to afford this house a couple years ago. Though in reality we never would have spent that much on our new home, so we would have settled for a smaller/older house. We ended up selling for $195,000 and buying for $266,000. We lost roughly $20,000 on the sale of our old home, but saved $60,000-80,000 on the purchase of our new home. The affordability of our new home, and getting everything on our “wish list” for our new home is what enticed us to sell in this ugly housing market. We are getting more house than we ever thought possible and staying within our budget. It was definitely worth it for us, and we couldn’t be happier!” –Valley Trails Clients
If you would like to discuss the prospect of selling and buying in this market with any of the people included in this case study, please let me know and I am happy to connect you with them. Their comments were requested and written with future buyers in their same situation in mind. Thank you for your time and consideration.
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