THE SILLIEST REASON TO SELL
Never gamble with the family home.
by Neil Jenman.
Some home owners are suddenly getting a great idea. Or so they think.
Their idea goes like this: Prices are predicted to fall - indeed, some economists are forecasting a 40 per cent drop in property prices. They say the country is about to suffer another Depression (even former Prime Minister Paul Keating predicts a lengthy and severe recession) - so, the home-owners reckon the smart thing to do is sell the family home now, put the money in the bank (where it's guaranteed to be safe) and then rent and watch as prices plunge. Oh, how clever.
When prices get low enough, these sellers-turned-renters can then metamorphosize into buyers and buy back into the property market, just in time to catch the wave of the next boom.
Of all the reasons to sell a property, punting on profiting from a price plunge would have to be the worst of all. No, it's worse than the worst, it's the most stupid of reasons.
Here are three reasons why you should not sell your family home just because you think property values are going to plunge.
First - and this is by far the most important reason of all. You should never gamble with the family home. I believe the family home is sacrosanct. It's the bedrock of a family's finances. It should be paid off as quickly as possible and never used for any purpose other than to house one's family.
One of the best pieces of advice I was ever given (by my former boss and friend Roger Gray) was, "Never include your family home in your assets because you've got to live somewhere. Get your house and then go chase your wealth."
Second - what if prices don't plunge by forty per cent, what if they only fall by twenty per cent, what if they don't fall much at all? Where will you be then? Always remember that the costs of selling and then buying another home amount to at least ten per cent of the cost of the home you are buying. And that's just the financial cost. What about the emotional cost? The friends in the area, the schools, the attachments, the emotional ties to the home, the feeling of warmth and security for all your family. What, you want to toss all that aside in the hope that you may (and let's stress may) make a few dollars in a change-over in some years from now.
Third - do you really think you can pick the exact top and the exact bottom of any market? If so, you'll be the first person in history to do it. You won't have to worry about making money from selling and buying your family home, you can stay in your home and get rich as a modern-day fortune teller.
If you're a home-owner with a mortgage, now's the time to knuckle down and get that mortgage paid off faster. With every interest cut, you can move closer to paying off your home. Just keep paying the higher repayment. Soon, that day will come when you will own your home. No mortgage, no debt, no hassles. It's a wonderful feeling. It's a heart-felt feeling.
Home ownership is all about emotions not finances. It's about your family not your money. Don't risk your family's happiness and security. Don't sell for a silly reason.
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This news article was written by Neil Jenman, Author & Consumer advocate.
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