The Maine and New Hampshire real estate markets have been hot for clients looking to sell their house. This has been especially true across the northeast, and great news for clients looking to cash in on their equity to upgrade or downsize depending on their living and lifestyle choices.
Of course, a hot market for sellers usually means a difficult market for buyers. Clients looking to buy a home in Maine and New Hampshire are finding their options are limited and the competition is high.
Low inventory in Maine is hampering clients’ ability to cash in on their equity. Many of my clients are hesitant to sell, dreading the obvious difficulty in finding a new place to live.
The process can be difficult, but it’s not impossible, and, most often, is worth it. Ultimately, what good is the equity you’re gaining in your home if you’re not able to cash in on it?
This month I thought I’d discuss some tips for managing the transaction process of selling your home and buying a new one in a real estate market with low inventory.
Maine’s hot real estate market means some clients are sitting on hundreds of thousands of dollars in equity on the home they own.
For those nearing retirement and looking to cut down on costs, that equity could mean a large retirement cushion with the opportunity to downsize and minimize future expenses.
For folks outgrowing their current home, this could mean a cheaper mortgage for more living space, more land, or a better location.
Of course, buying a home is not like buying simple commodities like cars or televisions. The real estate market in Maine and New Hampshire is bogged by low inventory. This means that you’ll have no problem selling your house – more than likely at a price above listing and even more likely within days of your home going on the market.
Finding and buying a home is the tough part. But there are creative ways to make the transition easier and more favorable.
The first option is to delay the closing on your home. As the seller, you can include in the sale of your home a contingency that stalls the final closing until you’ve found a new place to live.
The benefit of this option is that it takes the stress off the seller in having to wonder when they’ll need to find a new place. The obvious down-side is such contingencies can be off-putting for potential buyers.
For a buyer in a difficult market, paying a premium cost on a new home, the idea of waiting on the seller to find their own place isn’t appealing and could cause many to turn away, and less demand for your home means a lower sale price.
The second option is to look for short-term rental opportunities. You can sell your home, move into a rental and begin the home buying process. This option comes with its obvious headaches: having to move your belongings to an intermediate home only to move it to your new home months later is a pain.
You can look for seasonal rentals that are already furnished and hire a moving company to move and store your possessions until you’ve found your new place.
The logistics might seem difficult, but there are some obvious advantages to this option.
First, by moving to a rental you’re allowing yourself time to enter the real estate market without constraint or pressure. You can freely browse and make sound and deliberate choices on where you want to move.
A skeptic might point out that such a move could chew into the money you made on the sale of your home, and, while this might be the case for some, the reality for most is that they were still making monthly mortgage payments.
By selling their home, they no longer have to make those payments and instead are paying month to month rent on their short-term rental, meaning they’re using their weekly income to cover the rent without having to tap into the equity from their home sale.
For clients who no longer have a mortgage payment, this option would be a more expensive alternative. But, of course, owning your home outright gives you a lot more options to work with than my clients who, most often, are still making mortgage payments.
Buying and selling your home in Maine right now can be difficult process with a lot of complications to navigate around. Gone are the days (at least at the moment) of lining up a handful of open houses or showings and picking and choosing the house that’s right for you.
Those looking to cash in on the equity in their home have to find creative ways to adapt to the present circumstances – the low inventory of homes in Maine and New Hampshire. By doing so, however, they’ll find that the equity gained in this strong market is more than just a number on paper.
That equity can become a valuable asset giving you many options. Whether you’re looking to downsize or find a home that better suits your growing needs, getting creative and adapting to the housing market is necessary for making sure you can get the most of today’s real estate market.
These options aren’t ideal, but they do allow you to cash in on your home’s equity even in a competitive seller’s market. If you have any questions or want to discuss the process more, or if you’re curious what your current home could sell for, message me today!