5 Years Of Home Ownership Pays Offs Even If 1 Year Included Economic Slowdown

 

You Will Be Amazed What Can Happen In Five Years.

 

It was the summer of 2007 when I was showing various homes to a young couple who were anxious to purchase their first home.   It was hot, humid August weekend when we finally found the perfect home and following an evening of negotiations we were able to agree on a price of $12,000 less than asking price of $297,000. Having a down payment of $15,000 or 5% they secured a mortgage and moved.

We kept in touch, and in the summer of 2012 they informed me that they wanted to sell. They had been making mortgage payments for 5 years so it had been whittled down to $225,000.  They had not made any major upgrades and regarding updating they pulled up the wall to wall carpeting and sanded the existing hardwood floors.

After putting together a current market analysis I determined the present selling price would be $390,000.  We listed the house in early September and after 18 sold the house for 99% of asking price for $386,000. After paying realtor fees, lawyer fees and paying off the mortgage this couple will have $140,000.  This represents the 20% down payment they have for the purchase of their dream home – no more CMHC premium.

If you had been renting do you think that you could have saved the equivalent sum?  Maybe you’re one of those saying the housing market will take a big correction.   Well, we saw in the last quarter of 2009 home values dropped, however within 12months home evaluations we posting gains…more than offsetting the losses occurring at the end of 2009.

Real estate is a cyclical business -check out the October 2012 monthly housing price as it compares to the past 3 years.  November and December is the best time to buy and the worst time to sell.

Think of where you want to be in five years. You have a choice of waiting for this long anticipated and heralded housing price correction or take action and start reaping the benefits of home ownership.

So even with talk again of another economic slowdown home ownership still provides a solid return.