Wednesday, March 30, 2005

With Paper Profits, Owners Consider Selling Out

To sell or not: the decision for some home owners must be a tough one now. As this piece examines, people are all over the map when it comes to cashing in on the boom.

"Many homeowners are feeling as if they've won the real estate lottery..There's just one problem: It's all on paper. You can't reap the benefit of all that wild appreciation, or protect it from a blowup in your local housing market, unless you somehow cash out." The report goes on to review the pros and cons, while leaning to the sell side.

Some suggest betting the farm for bigger profits. "There's no reason to have 50% equity in your house," says Scott Leonard, who is advising many of his clients to strip excess equity and invest it in stocks or more real estate. He defines 'excess' as more than 20% of the home's value."

Fence-sitters may want to consider the following. "'Every client who comes into my office asks about buying a condo on spec, every one' says Benjamin Tobias, a Florida financial planner. The indicators of a market top are easy to find, from "get-rich-quick in real estate" seminars filling church a soon-to-debut reality-TV series."


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