Buying and Selling in the Same Market

2006/08/01 Originally published in the Vernon Morning Star.

Perhaps you were considering selling your existing home and purchasing a replacement home. Maybe you need one more suitable to your current needs or one that you simply like better. But, with the change in market conditions, you are perhaps concerned you will not get a good price for your existing home.
It is true that you are likely to get a lower price than the early part of 2008 or 2007's market would have yielded. However, when you buy and sell in the same marketplace, your replacement home should be correspondingly lower priced. It should be a "wash" as they say, at least for the most part. Certain types of properties are showing greater price stability than others, so this is not necessarily an easy analysis to make.
When you purchase, don't be mislead by some of the large price reductions we are witnessing. In the lion's share of these reductions the original price was well above the true market value. So, what appears to be a super deal may only be a reasonable deal or it may not yet be reduced enough in price.
Don't get me wrong. Some of these reductions are resulting in some very good buys, I'm just pointing out that one should not just assume a big price reduction means a good buy.
This is where your Realtor© is valuable to you. They can help you analyze the value of your intended purchase, prior to you making your offer to purchase. Your Realtor© can research recent sale prices of properties similar to the one you want to buy. They'll do various adjustments for condition, size, views, features, etc. and come up with a probable value range for you. You can even look at the data they've obtained for you, and draw your own conclusions if you prefer. If you are making the purchase through your Realtor© they commonly do not charge you for such a service. This same process is done for you routinely when you sell as part of the service you get when you pay the real estate commission.
You could also enlist the services of a certified Real Estate Appraiser. Most appraisers charge $300 or so for a standard in town residential appraisal. It's money well spent if it keeps you from selling too low or buying at too high a price.

Of course, even while you are going through this process, the market may be changing. So please be aware of that and try to negotiate your sale and purchase at very close to the same time. That way you are best protected from selling in a higher market than you buy on.
Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email or call 503-3755.

RE/MAX Vernon | 250.503.3755 | Toll free 1.888.503.3755 | 5603 - 27 ST | Vernon | BC | V1T 8Z5 | Canada

Market Information for Buyers and Sellers

Buying and Selling in the Same Market