Dear aspiring move up buyers,
The ones who, through luck of their Toronto property's incredible appreciation, have an enviable amount of home equity and want to use it to finally make a move for the better. Would you be among the cohort?
Have you been at it for a while, attempting to make this, your next and possibly last step in the property ladder, a reality? Trying to find a place you appreciate not only as much as your current home but even more? It can be quite the challenge, can't it?
No doubt you love many things about your current abode. Maybe it's the location, the extra high ceilings, the private rooftop deck you built, or the new kitchen you just lovingly renovated to your specs. All things you don't want to give up anytime soon. Understood.
And becoming house poor at this age and stage is not your intention either, am I right? You'd prefer to have cash for the family, to travel, not to have to work so hard, and perhaps even retire one day?
Hence the challenge of a move up buy that is based on home equity as opposed to improved income. It is the combined dream of having a home that suits your current life much better than your current house does, while also not spending much more than the value of your current home to get it. With such opposing interests at play simultaneously, it's no wonder your search may feel as though it's against all odds.
Most would-be move up buyers I've encountered admittedly feel pretty stuck. When I question what they can let go of to make their search more efficient and timely, I'm inevitably hit with a 'this needs to be a serious improvement or I'm not moving!' look.
So what are your options if you want to use your home equity wealth to fund a move? It may seem obvious when I put it this way, but your option combinations are in fact finite. Your search can be distilled to just four equations, no matter where you live, no matter what kind of market is at play, no matter if you're thinking of a move this year or five years from now.
Which equation can you work within?
Better Location + Better House = Higher Price
Better Location + Lesser House = Higher or Same Price
Lesser Location + Better House = Same or Lesser Price (higher if wayyyyy better)
Lesser Location + Lesser House = Lesser Price
If the problem you're looking to solve is location based, it makes sense that you should be prepared to pay up or buy a lesser house. If it's a combination better house while also saving for retirement, then it follows that you'll be moving to a neighbourhood that is considerably cheaper. If a straight cashing out is what you seek most, then downsizing or moving out of town altogether will be the gist of your move.
Awareness of the equation you're working within, based on the primary problem you're looking to solve, will go a long way to making your home search more efficient. You're much more likely to be ready at the next opportunity, after having already considered and accepted the compromises you're most willing to make.
Or, if you look at these equations and can accept none of the above, then at least you'll know why you're staying put!