Every book I have read on trying to time the stock market says don't. Most financial advisors recommend getting in and staying in with the proper asset allocation for your particular risk tolerance. When the market is up you're in good shape, and when it goes down you have some protection built in through your allocations.

While that's all fine and good in the financial markets, what is the advice when it comes to the real estate market? Should you sell in a down market? Should you wait for the market to improve?

I always advise my clients to consider what they are going to be doing with their proceeds after the sale. If they are getting out of the real estate market altogether and the proceeds are going to the bank or some other investment vehicle then there is nothing wrong with waiting to list until the market changes, unless of course they think they can make up their losses with their new asset allocation.

If they want to downsize in the real estate market it may also make sense to wait, assuming the move is optional and waiting doesn't cramp their lifestyle.

However, if you're thinking of moving up in a down real estate market it can make a lot of sense to sell rather than wait. There is never a better time to make a move up in real estate than when the market as a whole is down. True, you will probably not come out as well with the sale of your house, but you will more than make up for it when it comes to buying on the other end.

For example, assume you own a $150,000 house and you're ready for a $300,000 house. If the market is down 5% then unfortunately your current house is really only worth about $142,500. It's tough to ask much more than that and still be successful. However, if you are willing to sell for a bit of a discount here's what's waiting for you. Assuming that $300,000 house is also down 5%, then you're buying that house for $285,000! You accept a $7,500 loss when you sell, but you make $15,000 when you buy! It can get even better depending on the price ranges in which you are buying and selling. Every market has its ?hot spot? and its ?not-so-hot spot,? meaning price ranges where things are selling well and where things are not selling well at all. If you happen to be selling in the hot spot and are buying at an overly saturated price point there may be even greater savings on the buy side and not as much of a loss on the sale side. Typically the higher priced homes are the ones not selling as quickly, which is why moving up in a down market can work for you.

Current interest rates are another important consideration. If rates are favorable then you are able to make up for your losses when you sell by securing a good interest rate on your purchase. A 1% increase in interest on a $200,000 mortgage will cost you over $47,000 over the life of a 30 year loan. With interest rates currently near record lows it's something to consider.

Another common question is whether to sell in the fall or wait until spring. The answer follows my advice as a whole in selling in a down market. It is harder to sell in the fall because there are fewer buyers in the marketplace, but if you're willing to take a slight discount and you do actually sell your home, you will be in a great position as a buyer. In March, the seller who just listed is less willing to deal ? their home has very little market time and the busiest market lies ahead of them. That same seller, having toughed it out for many months and facing the prospect of still having their property over the winter, will be very happy to see you in the fall. This can, again, mean a very good price for the late-season buyer.

To summarize, in most situations it can make a lot of sense to sell when you are ready and willing and not to worry so much about timing the market. If you really look at the big picture, it's not so costly after all.

Copyright ? Shawn Buryska