For many people, the bulk of their wealth is tied up in their homes. As people approach retirement with a PLAN (Part I), the home and whether to downsize… or to acquire a 2nd home is a key decision.
If you have been diligent about paying down your mortgage, selling the home can be a source of liquidity to make sure that you have enough cash to live on and establish an emergency fund. In an ideal world, the home’s value would have appreciated and this equity could be the foundation of your retirement ‘nest egg’. This scenario is a far cry from the backlash reality of the current market decline, as people are seeing their home values slide.
On the other hand, there are amazing opportunities for purchasing a dream home at a fraction of its original cost. If you are in a position to take advantage of the market with a purchase and hold out a while longer for the market to shift back toward positive, that may be the best answer. Each geographic area has unique market characteristics. Truly understanding a certain market will help in timing a sale or purchase. This is called “gaming” the real estate market. This decision is critical in the overall success of the retirement plan.
Pay close attention to trends in the region you are considering by reading the local newspapers, searching the Multiple Listing Service… and by all means, using the service of a professional Realtor®.
If you have been diligent about paying down your mortgage, selling the home can be a source of liquidity to make sure that you have enough cash to live on and establish an emergency fund. In an ideal world, the home’s value would have appreciated and this equity could be the foundation of your retirement ‘nest egg’. This scenario is a far cry from the backlash reality of the current market decline, as people are seeing their home values slide.
On the other hand, there are amazing opportunities for purchasing a dream home at a fraction of its original cost. If you are in a position to take advantage of the market with a purchase and hold out a while longer for the market to shift back toward positive, that may be the best answer. Each geographic area has unique market characteristics. Truly understanding a certain market will help in timing a sale or purchase. This is called “gaming” the real estate market. This decision is critical in the overall success of the retirement plan.
Pay close attention to trends in the region you are considering by reading the local newspapers, searching the Multiple Listing Service… and by all means, using the service of a professional Realtor®.
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