Catherine Weir
QUARTERLY UPDATE OCTOBER 2021
THE REAL COST OF BUYING OR SELLING A HOME I
am often asked by clients buying a home how long do they need to stay in their new home before they can sell it and make money. The answer is it really depends. It depends on the market cycle you buy in, the interest rate you purchase at and how much you put down on the house. All these factors will have a bearing on how soon you can sell again and walk away with money in your pocket. Let’s start with the cost of buying a home. The great news is that there are very little additional costs to you as a buyer to buy a new home. All you need is your down payment and preapproval letter from your lender. Your lender will let you know any additional costs such as your closing costs which are generally around 1% of
WHAT ’S INS I DE Eastside Market Updates, pg. 3
the home purchase price. You should also factor in around half of the escrow costs once you are under contract but that is all you need to put into your budget. The real costs are when you choose to sell your home. As a home seller you are responsible for all the Broker/Agent fees which are around 5-6% of your home sale costs. In addition as the seller you have to pay excise tax of around 2% to the government, you are responsible for half the costs of escrow around $1000 and you also have to pay for title insurance for the new buyer which is around $2000-$3000. If you sell within two years of buying you are also looking at paying capital gains tax in WA state as well. Yes, you read that correctly the total costs of selling
Q 3 2 021
The Real Cost of Buying or Selling a Home? continued...
King County
“September saw slightly less houses go on the market however all these homes were snapped up and home prices continued to rise”
a home add up to around 8% of the home sale price. If your home sells for around $1M you need to factor around $80K of that will go to the costs of getting the house sold before it even hits your bank account.
next two years help you make up some value and cover the costs of selling. I hope that is helpful and insightful so you can make informed decisions whether buying or selling a home.
Back to the question of how long does someone need to stay in their home before selling? In this current market where home prices are rising at 16%/ year then theoretically you need to stay only one year to make some money back. However, this does not take into account the costs of borrowing money, the costs of moving and where you are going to. I used to say that if you factor five years of being in a house before selling you will come out ahead. This year I have seen people own real estate for barely two years and doing very well when they sell. My advice is to think of buying anything at a minimum for three years. After three years it means you avoid capital gains tax and make up for any market upswings where you are paying 10% over the value of a home before you even get an offer accepted. That first year in a new home would get you recovered from buying and the
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CURRENT vs PREVIOUS MONTH
CURRENT vs PREVIOUS YEAR
CURRENT vs QUARTER SAME MONTH LAST YEAR
Sep 21
Aug 21
% Change
Sep 21
Sep 20
% Change
Sep 21
Sep 20
% Change
For Sale
268
317
-15.5%
268
586
-54.3%
945
2162
-56.3%
Sold
787
867
-9.2%
787
862
-8.7%
2638
2543
+3.7%
Pended
716
838
-14.6%
716
848
-15.6%
2283
2590
-11.9%
Avg Sq Ft Price (Sold)
$606
$599
+1.2%
$606
$453
+33.8%
$595.33
$448.00
+32.9%
Months of Inventory (Closed Sales)
0.3
0.4
-25%
0.3
0.7
-57.1%
0.4
0.9
-55.6%
SEPTEMBER 2021 was a Seller’s market! The number
of homes listed for sale was down from one year earlier and down from the previous month. The number of homes under contract was down compared to the previous month and down compared to the previous year. The Months of Inventory based on Closed Sales is down significantly from last year. Based on the 6 month trend, the Average Sold Price is up a whopping 32.9% over last year. The Average Days on Market is up slightly over last month, but down over half compared with last year as competitive offers with short closing times are getting accepted more often.
Homes on the Eastside are still closing at 105% of the listing price an increase of 3.8% compared to the previous year.
Q 3 2 02 1
Eastside Update
Catherine Weir Coldwell Banker Bain 1151 NW Sammamish Rd #103 Issaquah, WA 98027
Just Sold | $1,100,000
4352 252 nd Place SE, Sammamish, WA 98029
Just Sold | $1,711,000
12616 NE 68 th Place, Kirkland, WA 98033
“I value each and every one of my clients and always negotiate to get them the best terms possible. When you want first class service from someone that is honest, straightforward and an advocate for you – make me your first call.”
Catherine Weir