Almost anywhere in the U.S., when you sell a home it will cost you about “9%” including the commissions paid to the realtor, closing costs, escrow and moving expenses etc.
Keep in mind; these costs do not include maintenance of the property.
Because of the ‘rule of 9’ you are likely to be better off renting if you only plan to stay in a home for 2 years.
Even though many homeowners count on the mortgage interest deduction when factoring their return on investment, it’s often not as much as they expected.
Let’s say you buy a home for $200,000 and sell at 24 months, using the rule of 9, your costs as outlined above will be about $18,000.00.
Unless your home appreciated in value by at least 9%, you will likely lose money.
Realtors will often try and convince you to lower the price so your property will move faster.
But remember, for every $10,000 you lower the price, it only costs the realtor about $300 in commissions.
This is because their commission is 3% of the selling price.
So if your home appreciates to $220,000, but your realtor convinces you to sell at $210,000, you’ll lose about $9,000 on your investment.
Remember the “rule of 9” anytime you are looking to buy or sell a home.
It can either help you make money or come back to haunt you.
NOTE: This report was excerpted from the “Real Cash Secrets” Home Study Course.
To learn more, click below: