Gary White FlexIt Realty~Real Estate & Updates, Grand Rapids & West Michigan

Home owners that have their homes listed or contemplating listing have some real concerns about equity....or should I say disappearing equity.

The key of whether the equity is real is depending on how much is left after the sale.  The equity before a sale is only speculation.  That means if you didn't have it in your hand it was speculation.  Now we can say a year ago you might have gotten more for the same home.  That is probably true....but that was a year ago.  Depending on which poll or researchers you read home prices have fallen 18% in Michigan...while some of the other areas of the country have been stable.  Even more of a market driven issue is evident by areas still showing increases in home values.  Some areas of Texas, California, Washington and pockets within Michigan show growth or neutral changes in sell prices.  That is not typical or the national market.

So should the market changes be a concern....absolutely.  How do people make sure they do not loose more equity?  Sell...and fast.  HOW?  There does not seem to many buyers.  Simple price your home right.  People with homes priced right sell faster...and for a higher price.  So why doesn't everyone do this?  The average seller wants to maintain the perceived equity value...and some of the less skilled Realtors are willing to let sellers chase the myth with a dream that is only a mirage that moves once you arrive.  The mirage of equity looks so good on paper....so push the price up a little...the mirage looks bigger and better.  Then reality hits with a for sale sign that sits out front of the home and the mirage looks far off in the distance and almost disappears with each passing day. 

Career real estate professionals keep a constant vigil monitoring the local and regional market fluctuations.  They look at the sellers they represent as though it was their own property for sale.  Not only do career professionals do this, they inform sellers, even when it is painful news.  The goal is to sell faster and retain that precious equity.  Remember equity has two sides....an up side and a down side.  This means that even if you sell on the down side...you also purchase on the down side.  That means you are likely to pick all the equity you lost on paper when the market comes back.  If you purchase a more expensive home....your gain is even going to be more because of the percentage in change vs value.

So stop chasing the mirage only to be disappointed......achieve your sale and find your dream home while the market is in your favor.  Think of the people that just purchased.  A home like theirs in the same neighborhood is probably selling for thousands less than when they purchased....it will come back.  They only lose if they sell.

I hope this gave you an insight into the reality and mirage factor of equity.  Call a career professional when you really want the current market facts.

Gary White, Associate Broker, serving Grand Rapids and West Michigan www.MovingGR.com  My website has over 30 Free down-loadable buyer and seller documents to help you.