Real estate is something that investors look at similarly to stocks. The goal is to buy when the value is low, wait for it to go up, and sell high. Sounds simple, right? It’s not.
For one thing, you have to know how much growth you’ll really see. It could be from 2-3%, which is steady and expected growth. If it outpaces that, it means you’re doing very well. You need to know when to sell and when to hold.
Now, if you’re an investor, flipping that house is easier. You may just own it as an investment, renting it out while you wait for the value to increase. You live somewhere else. When you see the value you want, you stop renting it, sell it, and use your earnings to keep investing.
If you’re just a homeowner, though, things get tricky. You need to buy another house. Some people use their earnings as a downpayment to get into a home they couldn’t have afforded before. This can allow you to trade up.
But, if you’re just selling to make a profit and looking to make a lateral move to a similar house, the issue is that the other homes in the area have probably gone up at the same rate. You may sell and make $50,000, but did you really gain that money if you just have to pay $50,000 more for essentially the same house? This is why it’s important to carefully consider the home values in different areas to see how you can maximize your position.
All told, selling your home can be complicated, and you must know what steps to take so that you don’t end up making a mistake that will haunt you later. The smart move is to work with an experienced real estate attorney every step of the way.