If every house on the market appreciates at the same level, how is a person ever to afford the bigger house? Resort to bank robbery?
Well, not to put a damper on the traditional bank robbery method, but there are ways to get that second bath, third bedroom, or larger yard that don’t involve a felony.
Let’s begin with the first supposition: Appreciation.
Appreciation is not constant among housing products because demand is not constant among the housing products. And because demand is strongest among products that most people can afford, it is likely that your starter cottage has increased in value more quickly than the 4000 square foot mansion up the hill.
So don’t knock appreciation as a tool! It’s the single most effective way to gain wealth and move up in square footage.
Your next tool: Improving your cottage. Most folks buy their starter houses, warts n’ all, and embrace the fact that they are saving money because they didn’t get a house with nicer, newer features. Now is a great time to give your cottage some of those nice features that will pay you back when you sell. Most of these will cost less to install than you might think and improve your future price far more than the cost of the work. Important: Seek the advice of your Realtor before you come up with your improvement plan! Some things that cost a lot don’t return enough value to make them worthwhile.
Consider taking on a temporary job in the evening or on weekends. Holiday retail work, pizza delivery, tutoring math: If all the excess cash goes to the down payment, your short-term pain can become long-term lower payments.
On to shopping.
Choose a lower-cost area to move to. Even a 10-minute drive further from your town’s city center will save you money.
Choose an older house. Consider something that needs updating.
Shop in winter! Oftentimes, winter sellers are more motivated and may cut you a break when you need one.
Lastly, it is Always best to sell before you buy. You will pay a premium to any seller who has to wait for you to put your house on the market and then wait until you have a buyer. But don’t worry, you won’t be homeless if you strategize the sale of your own house. This is where you need your Realtor to structure your deal(s) so that the best of all possible worlds is, well, possible!