111,285 Reasons You Should Buy a Home This YearThe financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the
I just bought my home a year ago. Will I lose money?
Dated: October 31 2019
Oh, yes. The burning question of every seller, who is looking at selling a mere year after purchasing.
Will you lose money? That depends. Have you made improvements or renovations? Did you purchase in an area, where property values are steadily appreciating? Did you purchase a home with features that are in high demand with all buyers? Historically, stable markets with gradual appreciation take 3 years for a seller to break even or profit.
Life happens. Maybe you're getting a divorce (oh no!). Maybe your company is moving you to an exotic location (can we come, too?). Maybe you took on a fixer upper that turned into a demo job that's quickly devouring your savings account. Regardless of the reason, here's what you can expect:
You probably won't PROFIT, but there's a chance you don't take a loss. After deed stamps, attorney fees, etc, your best bet is to break even. We'd love to make you better promises, but those champagne wishes and caviar dreams are just in the movies.
Buyers already know what you paid for the home a year ago. Unless you can prove that you've made improvements, a buyer isn't going to want to pay your increased price. The RARE exception may be if you purchased a home that had JUST been renovated or one that was new with all the bells in whistles in a highly desirable area. If a buyer feels they won't have to spend money for a while, they may not have a problem paying a bit more, if they can see they won't need or want to make costly changes in the near future.
Don't be Ebeneezer Scrooge. We get it. The entire reason you purchased a home was to INVEST and EARN on your money. But we have the stats that PROVE over-pricing your home will just end up buying you more time on the market (no pun intended) and costing you even MORE money in the form of multiple price reductions.
Consider other options. Could your agent help you find a buyer, looking for a lease with option to sell? What about AirBnB'ing that puppy? We've helped several clients be profitable with an AirBnB option until their home had enough time to build up equity.
Here's the beauty of investing in real estate: there are always options. Now, we aren't genies in a bottle so you can't rub us the right way to get your intended result, but there are strategies for navigating these gotta-go-sell-soon situations. In the words of the great theologian, Kenny Rogers, "you've got to know when to hold'em, know when to fold 'em, know when to walk away."
My husband and I are the founding members of a top selling Real Estate team in Anderson, SC. I have been a native of the area for over 20 years and attended elementary, middle, high school and college....
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