Hi folks,

Today I’m writing about a particular topic that most of my vendors have heard before, the reason why it’s better to trade up in a deflated market. Many homeowners look at the market and think they have missed the best time to sell their home. They think that it’s smart to wait until the market ‘picks up’ before they get that extra bedroom or the rumpus room they now need for their growing family. Is this really good thinking?

Many homeowners forget what is taking place when they trade up. They fail to take into account that buying a home more expensive than the one they are selling gives them an opportunity to make money on the transaction. If the reason they think it’s ‘not a good time to sell’ is because they ‘will not get a good enough price’ for their home, then the logical next step is to realise that if the market prevents them from getting the price they want, it will also affect the sellers of the property they are trading up to – with a net gain to the person who is trading up. If you are selling a house for $300,000 that you feel should be worth $330,000 and buying one for $400,000 in the same market, then the same would apply to the owners of that home; the more expensive home (working on the same percentage of 10%), should have achieved $440,000. In net figures, the person who is trading up stands to gain $10,000.

In fact, there are other advantages to trading up in a buyers’ market.

Because prices are stable and properties often take longer to sell, once vendors have sold their original property there is no rush to buy. They can take their time choosing and negotiating their next purchase without having to watch the gap between the price they got for their original property and the price they have to pay for their next one increasing at an alarming rate.