Personal & Financial Strategies

How Important is Timing?

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Timing a purchase as big as your home can have long-term effects. Jonathan Krause, of Gambino Realtors in Rockford, shares how timing might impact your next real estate transaction.

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You’ve no doubt heard the phrase “Timing is everything.” Perhaps you have even recited it yourself under certain circumstances. I know that timing is critical under a variety of scenarios, but is it everything when it comes to buying or selling a home?

I would like to offer the following observations regarding buying and selling a home, and hopefully you can then determine for yourself whether timing is everything.

My first observation is that owning your own home involves so much more than just its value as a financial investment. First and foremost, we buy and own a home for the shelter and security it gives; for the pride of ownership we enjoy; and for many memories it will hold for our families over the years. Buying a home is one of those few life-changing moments in our lives. It’s similar to going off to college, getting married, and having children. When you walk through that front door for the first time, or the last time after many years, somehow it is a life-changing event, and you just can’t find that with any other investment.

My second observation is that owning a home is a long-term investment. When I began my real estate career in 1985, the average home in Rockford sold for a little over $50,000. At the peak of the market, it was about $150,000, and today it is about $115,000 and going up steadily. I don’t believe many of us could have accurately predicted the length and severity of the recent recession. Certainly the Federal Reserve and many financial advisors as well as large banks and financial institutions were surprised as well. If you bought at the peak in 2006 and had to sell a few years later, you suffered a big loss, but if you owned your home since 1985, you’ve still more than doubled your initial investment!

My final observation is that if you’re holding off selling your current home until prices go up a little more, keep in mind that the price of your next home is going up as well. Likewise, we know that today’s mortgage interest rates are at historical lows, but no banker I know can tell you what they will be six months from now, let alone what they will be in a year or two. It’s quite possible that while you wait for your home’s value to increase, you could be paying a higher price and a higher interest rate for your next home.

Timing the purchase of a new TV or new clothes to coincide with a sale is great, but as you can see, timing the purchase or sale of something as big and life-changing as your home is far more complicated. It’s not something you can plot on a chart or graph to get it perfect; it’s like all of the other big moments in your life – when the timing is right for you, you’ll just know it.

“You can’t always wait for the perfect time. Sometimes you have to dare to do it because life is too short to wonder what could have been.” – Author Unknown

Jonathan R. Krause, CRB, is president of Gambino Realtors in Rockford, Ill.

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