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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Selling investments for house purchase

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: I could buy a house by cashing investments but I was planning to wait until housing prices fall later this year. Would it be better to cash in my investments now or wait until I need to make the down payment?

A: Housing prices are not really expected to fall further this year but you may find more houses to choose from later in the year. This is because the housing market tends to be "elastic"; meaning that most house sellers will leave their houses on the market longer rather than accept a lower sales price. This makes the buying process easier because the buying "frenzy" that existed in some markets over the past few years is likely to die down. A planned systematic sale of your investment would probably be the safest way to maximize your cash proceeds while minimizing risk of a last-minute drop in the investment market. It is not unusual lately for the market to be up and down by more than 5% in a single month. If your timing is off, this can really hurt. A systematic sales plan eliminates that risk.


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