I’m currently considering upgrading my home, but I’m not sure if it’s the right move. Maybe you’re in the same boat and need to talk it out. A year ago, I had my eye on a house, but it didn’t sell because the price was too high. Then the S&P 500 took a hit and mortgage rates went up. Now, the owner wants to try selling again, but this time, he’s doing it quietly as a "coming soon" private listing to avoid the embarrassment if it doesn’t sell again.
As an experienced real estate investor, I have a few tricks up my sleeve that could help me get the house for at least 10 percent below last year’s price, which would be about 3 – 4 percent below its estimated fair market price. The thing is, I’ve always jumped at every real estate deal I’ve seen, mostly because of FOMO. It’s hard to pass up a potentially profitable investment. But just because a property is a great deal doesn’t mean it’s always the right move. As I get older, I’m also looking to simplify my life and be more present for my family.
Upgrading homes can be risky, especially if your current home is just fine. After a real estate market correction, you might be tempted to upgrade. For example, if your $500,000 home loses 10 percent of its value, you’re out $50,000. But if the nicer $1,000,000 home you want also loses 10 percent of its value, you actually come out $50,000 ahead if you buy it! This is the situation I find myself in. Buying a nicer home after a real estate correction can be a financial win.
But there are risks to consider. You might end up with unpleasant neighbors, or find yourself in the middle of noisy remodeling projects. You might discover problems with the new home that you weren’t aware of, or find that the layout isn’t as good as you thought. And of course, there’s always the risk that your financial situation could change for the worse.
Despite these risks, I’m still considering going for the upgrade. I plan to make a low-ball offer that’s not insulting, and try to convince the listing agent to also represent me so the seller can save on commission. If the seller refuses my offer, we’ll just continue living in our current home. But at the end of the day, I don’t want to regret not trying to go for this nicer home.
After successfully purchasing the new home at a 14% lower price and moving in, I can say that I don’t feel happier, but I do feel more satisfied. The satisfaction of providing the best for my family is priceless. And every month that goes by of saving more money makes me feel more at ease with this forever home purchase.
So, have you ever upgraded homes only to discover it wasn’t as great as you had imagined? What were some disappointments you had in your new home? What are some other potential disappointments upgrade homebuyers should be aware of?
