Bay Area Real Estate Myths that just won’t die.

Myths! There’s a lot of them milling around out there in the buyer and seller worlds. They mess folks up! Misinform them, and make them believe inaccurate information as fact.

The particular myth we are addressing today is the “move up buyer myth.” It’s an idea that’s particularly misleading here in the Bay Area. The move up buyer myth is the idea that homeowners can smoothly transition from a condo or little starter home to a bigger long-term home by simply using their equity as a down payment. Such a sweet idea, cute, isn’t it?

But cute is about as far as it goes in the Bay. It’s certainly not real.

The primary problem lies in the gap. Sure, you might have quite a lot of equity in your starter home. But the Bay Area don’t play. Those price tags on big houses in great school districts are no joke, and the equity is very often insufficient.

A lot of owners of attached homes like condos or a townhouse experience stagnation in value. High HOA and insurance prices cause owners of attached homes to get a lot less profit than anticipated in the final sale. It’s a bummer.

Competition around these parts is still hot and heavy as ever. Most sellers aren’t cool with offers that have sale-of-home contingencies.

Even if you have a chunk of equity for a down payment, you still have to make the difference with a big ole loan. It’s a lot to take on. Interest rates are high, and the monthly payments can be a lot.

So it’s just not that easy. There’s a lot of planning, preparing, and a lot more money to come up with up front than we are led to believe.

So what’s the move?

Basically, experts recommend that you live in a house a minimum of 2 to 5 years in order to offset realtor fees and closing costs. Check that you qualify for capital gains tax exemptions. Get on Zillow and Redfin and sleuth around some to see where you stand with possible profit. If you are no longer fitting in your starter house, or your family planning includes needing more space in the near future, or you have to get in a different school district, these are all indicators that you are in a stage in life that might require making that move up.

When you are listing your starter house, you don’t necessarily have to wait for the traditional spring season. If there’s low inventory in your neighborhood, that will drive up the price of your home, no matter what season it is.

That slow season, or off-season for listing houses, is actually less pronounced in the state of California because of the weather. Except for some pockets, the general weather conditions are mild enough that it doesn’t impact showings or buyers' ability to really see what’s up with any listed properties.

So you’re really looking much more at being financially ready yourself and seeing if that market makes sense to list in.

Have you all heard that Thursday is the sweet spot to list homes? It gives buyers that are biting at a bit enough time to schedule a viewing over the weekend, but it also doesn’t cause your house to sit stagnant for five days before anyone is off work and able to view.

Zillow has a cool feature these days called the Buyability Calculator. It allows you to see how your potential home sale can impact your budget for your next move. Very helpful information!

Don’t rush to list before your home is ready. You gotta put that work in and take the steps to get everything in order to look extra nice for photographs!

So in the end, the myth is really that it’s ever a smooth transition. It will inevitably require more money put down than just the equity you can get from your previous sale. It requires much more financial planning than just that home sale.

But of course, it can be done. The move can be made! We just want to be so for real about the amount of money and work it really takes. Cute stories about how it goes in fairytales don’t always translate to real estate, and that’s okay. We can make it happen out here in reality, absolutely.