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IF you bought a home in the heigth of the real estate market...would you sell now at a loss?
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Anonymous
| Just curious, we bought at the absolute height of the real estate market (we're talking bidding wars on major dumps) and now we want to relocate to lower our overall costs for a lower mortgage,,,,but unfortunately we'd take a big hit in the process...but we'd be saving more $$$ each month due to having a lower mortgage...has anyone else been in this situation? What do you think? Will the real estate market ever recover? How to predict? My DH says only way is if employment/growth picks up |
Anonymous
| Are you having trouble paying your mortgage? Can you refinance? Do you need to move or do you want to move? |
Anonymous
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We're stuck in our house that is too small for our family but do not want to sell because we would take a loss (would probably get what we paid but factoring in selling costs, it's a loss) and would not have enough of a down payment left for a house in a similar or better neighborhood (I quit my job so our income is pretty low--could not afford to buy our house today). In our case we are just happy that we can refi at a lower mortgage rate.
However, IF I were still working, I would definitely consider selling our house, even at a loss, because we would be able to buy-up with ridiculously low mortgage rates. If I could get the house I really wanted, one that I plan to live in for the next 10+ years, I would take the hit today. |
Anonymous
Well, we are not officially having trouble paying it, we are never late. But as I am a SAHM for the meantime (I do plan to go back part time in the future) I feel we could cut our costs significantly if we moved to a home at a lower cost than this one and have a good chunk of money left over for savings for our kid's college and etc...It just seems like the market today homes are a good 30K less than what they were in 2006. and if you add that to the closing costs it really is a huge hit. |
Anonymous
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I wish my condo was only 30k less than what I paid in 2005! However, we just decided to sell because as 19:45 said, we are able to buy a house that we will be in for at least 10 years at a very low interest rate.
It is a tough pill to swallow, however, it is time for us to move on and there are positives to buying property at the moment. I am choosing to concentrate on those! |
Anonymous
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We did. We took a big loss to move from a far out suburb to close in. We factored in the cost of private education for DCs if we stayed where we were, lifestyle issues, lower interest rates and a more stable real estate market. Most of the money we lost was from the profits on a prior home.
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Anonymous
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One thing to consider is the down payment that's now required. Depending on the cost of the house, you're looking at needing 10% to 20%, whereas at the height of the market, you could get away with 5% or none at all. With prices what they are around here, that can be a lot of cash, especially if you're also having to pay cash at the sale of your house.
We'd be willing to take a loss, but we're also planning on renting for the next couple of years because there's no way we'll have a down payment large enough, especially if we exhausted our savings on the sale. One other consideration is this. If you don't feel that housing prices are going to go back up anytime soon (and I don't), it might make sense to take the loss and capitalize on the good rates, rather than wait for prices to go up and miss out on the rates. Or worse yet, wait to sell, end up not being able to wait long enough such that you miss out on the good rates and still take a loss. I also think that the good rates are helping prices -- there are more buyers now because people want to take advantage of the good rates. Once rates go up, I wouldn't be surprised if the market got tougher for sellers. |
Anonymous
| Depends on the loss. 30K, yes....200K+, I'd short sale,walk, or try to get the principal cut. I think ppl that are hundreds of thousands in the hole will be there for decades. I'd rather take the credit hit and shame than sit on a bad investment. The banks got a bail out for their bad choices and risky deals, so I say all bets are off, I'd say every man for himself and fuck it and save myself. |
Anonymous
nice. |
Anonymous
That is a rosy picture. If the economy does not improve, it will be a down right collapse. NOBODY (well normal people) can afford a house 450k+ at 7-8%. For example 400K mortgage (PI) at todays rate is $2,086...If that same mortgage is at 8% is $2,935. Once you smack taxes, potential MI, and insurance on there, you are looking at a $3600 mortgage for a 400k house, which won't get your shit and cuts a huge amount of buyers out of the market. Compounded with the fact that we have been spoiled with low rates, people will completely recoil at rates over 6%. |
Anonymous
I very much have this fear. We would probably take a small loss if we sold right now. While I do think that I might someday want to move, we haven't pulled the trigger because we very much like the neighborhood we're in. But it scares to me think that we might end up stuck if the above scenario plays out. I am far from an economic expert, but it seems to me that rates can't stay at historical lows forever. |
Anonymous
But if you buy a new house you're still going to have closing costs...and all that for a house that costs 30K less??? And don't forget the realators' commission. Do you have enough $$ to cover the down payment? It's usually about 20% which is quite significant compared to the "golden era" of 5%. Also, I assume you are still paying down the principle on your current house, correct? So, you're still paying off the interest and not necessarily the actual price of the house? |
Anonymous
| If you can afford the down on new place, I would do it. Int rates can't stay this low for too long. It's going to take you potentially many yrs to not take a loss of closing costs on your home. We ended up taking a huge hit to get out of a condo (~100k) bought at height like OP with bidding war. Tough pill but no way could we stay there and we needed tha capital from the sale to put towards the new down (else we would have looked at renting it). |
Anonymous
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If you're only talking about a 30K difference, then you are fucking nuts to move.
Please go look up the concept of "transaction costs." Also, there are tons and tons and tons of people in the DC area who did, and still could, afford a mortgage at 7-8%. OH NOES, THE SKIES IS FALLINGZ!! Get a grip, people. |
Anonymous
| We lived in NYC and took a hit of about 50-75 between the money we paid at closing (25k) and the money we had put into the place (condo), renovating it. It was a very hard decision to make, but I think it was the right one. We then moved to DC and now rent, but we cut our living expenses in half, literally, and are making a teensy bit more money than we made before. In just one year we will break even again with savings. The whole experience soured me on buying a home. I know we will again, but I will be SO much more cautious this time. If it helps, I can tell you that we were on the fence about taking a loss for a good year, but it was the best decision we ever made. I wish we had done it earlier. |