Many potential buyers struggle with the fact that property values are skyrocketing. But some people benefit from exorbitant real estate values.
Take existing owners, for example. Those looking to downsize have the potential to make a handsome profit selling their home. And those who aren’t looking to sell have more options to borrow against their home’s equity.
As is the case for many people today, my house is worth much more now than it was a few years ago. In fact, recently a realtor contacted me with an offer that would leave me with a profit of $250,000 on my house. But although it’s a staggering amount of money, I won’t sell for a few big reasons.
1. I won’t really make any money
The extra $250,000 I could make selling my house? It won’t really be mine to keep. This is because I will probably end up having to spend that much to buy a replacement house.
At this point in my life, I’m not looking to downsize. I have three school-aged kids and a big dog, and we’re not looking to lose acreage. So what I gain by selling my house, I will lose by paying a premium for another.
2. I will end up with a higher mortgage rate
Mid-2020, my husband and I made the decision to refinance. Since rates were so low then and we were able to take out a 15 year loan, we are now paying very little interest on our mortgage.
If I were to sell my house and buy another, I would need a new mortgage. And since borrowing rates are much higher these days, that would mean committing to paying a lot more interest. It’s money that I prefer to invest or keep for myself.
3. I don’t want to move
I know what it takes to pack a house from top to bottom, and it’s a task I’m really not ready for these days – not with a full-time work schedule and a busy schedule of activities for my children. In addition, moving is expensive. And since we have a lot of stuff, I would even expect a local move to cost a few thousand dollars.
Also, I know very well that moving for even a few minutes could result in the removal of my children from their current schools. It’s not something I seek to do.
I’m not tempted at all
You would think that a profit of $250,000 would at least inspire me to consider an offer on my house. But in fact, it does not appeal to me at all given the state of the real estate market and my lack of desire to uproot my family at the moment.
The truth is, many people could make a decent amount of money selling their homes today. Because the housing market is sorely short of inventory, buyers are desperate for properties, and many are bidding generously as a result. But before you rush out to pursue a tempting offer on your home, ask yourself if you’ll actually gain financially in the process. You may find that staying put is really your best bet.
The Best Mortgage Lender in Ascent in 2022
Mortgage rates are rising – and fast. But they are still relatively low by historical standards. So if you want to take advantage of rates before they get too high, you’ll want to find a lender who can help you get the best rate possible.
This is where Better Mortgage comes in.
You can get pre-approved in as little as 3 minutes, without a credit check, and lock in your rate at any time. Another plus? They do not charge origination or lender fees (which can reach 2% of the loan amount for some lenders).
Read our free review
We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.