Premium sell/buy now, or sell/buy later? West Michigan

[Matt Kammeraad]

Hello Everyone!

I'm debating whether or not to sell my home and upgrade to a larger home.

I purchased my current home as a forclosure in 2011 for $63k. I put about $15k into it over the years. Now, I could sell it in a week, easily, for $145k. I owe $65k on it. After paying commissions, I could net $60k-$70k.

The new house I'm looking at is listed for $290k. I love the house. I've studied the West Michigan real estate market for several years now and I'm positive that this house is listed too high. I believe a fair price - even in this market would be $240k-$260k. Needs a couple of upgrades, but everything is move-in ready, on an acre lot, and has just about everything I'm looking for.

My plan is to wait about a month and submit a low-ball offer of $240k. By then, if the house hasn't already sold, the price will most likely have dropped to $280k. Assuming the sellers want to SELL the house, let's say we land on $265k.

The dilemma is... $265k is a decent price for this house in TODAY's market. No one knows what's going to happen even in the near future. Interest rates are amazing right now, and they could be horrible in a few years.

I'm afraid that if I buy this house at a premium (what I think is $25k-$35k over priced), that the market will calm down and return to where it was in 2013-2015. The house value drops to $220k-$230k, and all of a sudden I have negative equity.

THE QUESTION to you is: Should I remain in my current house and see what the market does, OR, should I jump on this larger house (take advantage of today's rates) and hope the market at least remains where it's at?

If I buy the larger house, I don't plan on moving within the next 5 years.

Thanks.