Buying or selling real estate involves huge decision, both from a financial and personal point of view. There are tax implications, moving expenses, down payments, cash flow limitations, and so much more! Sometimes it’s an easy decision to make a move, but sometimes it’s hard to decide whether you should stay put, or look to move. I find myself struggling with the same decision (if you recall, I’ve taken my husband house hunting recently but we have yet to commit to anything). I decided to put my thinking cap on and make a pros/cons sort of list to help guide our decision, I thought it might helpful for some of you:
1. Do you HAVE to move? Do you WANT to move? Very different scenarios. Let’s say you live in a studio condo (and for arguments sake, let’s say there’s 2 of you adults), and you found a baby is on the way….chances are, this is a “have” to move scenario. What if you’re just bored with where you live now or you think it would be nice to have more space after watching all of those HGTV shows? That’s more of a “want” to move scenario. If you want to move…
2. Can you afford it? If you’re renting, when is your lease up? Can you find a place to buy that you’re comfortable paying for in that time frame? If you have to sell your current place to move, what will it cost you to sell? Will you make money? What about taxes after the fact (if you’re not exempt from Capital Gains)? Look at the overall financial picture when considering if you can afford a move.
3. Are you financially comfortable where you are? Is a life change on the horizon the reason you’re looking…and if so, how will that impact your finances? Thinking of switching careers? When I made the switch from a salary to a commission job, I had NO idea what my income would be that first year (or year after), so I decided to stay put where I was rather than risk assuming a larger monthly commitment. Are you getting married and combining incomes? What will your expenses look like as a couple? Chances are with 2 incomes you can afford more, but that doesn’t necessarily mean you want to spend more. What about a growing family – a baby, a dog, another pet? What monthly expenses will that add to your budget?
4. Are you trading in one space for the identical space but a different layout? I recently showed a couple a home in North Arlington that would give them about 200 sq ft more than they have now in their 2 bedroom condo, but all they were really getting was an extra bedroom and a small yard….for about $100k more than their place is now. Is that worth a move to you? How important are those 2 items? Arlington housing prices are ridiculous, we all know that compared to the rest of the US. So when evaluating what you actually need a home (whether it’s a condo, townhome, or detached) figure out what your must haves are. If a yard is important, chances are most townhomes and condos are out. Is little maintenance important? Then some townhomes and most condos will be in.
That’s where my list ended…if you have other criteria you used to help evaluate whether it was time to make a move I would love to hear it!