IF you bought a home in the heigth of the real estate market...would you sell now at a loss?

[Anonymous]

I would sell at a loss if I could then turn around and buy a bargain. The interest rates alone make it worth it, over the life of the loan....

[Anonymous]

Anonymous wrote: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.

You can't get a short sale just because you want one. There have to be circumstances that necessitate selling (death of a spouse, loss of job, new job that requires a move, etc). Wanting to sell because you want to get out from under a underwater house isn't enough of a justification. No way the bank would go for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

You can't get a short sale just because you want one. There have to be circumstances that necessitate selling (death of a spouse, loss of job, new job that requires a move, etc). Wanting to sell because you want to get out from under a underwater house isn't enough of a justification. No way the bank would go for it.

They do ALL THE TIME. I'm the poster of this and we are in a very healthy situation, BUT I know people (and my mom represents short sale sellers and bank forclosures) and there are many loop holes to do exactly that. You don't pay for a few months, hide a few bucks, exaggerate circumstances....the banks are WAY too disorganized, overwhelmed and in a state of crisis right now to be tight and clean about the process.

[Anonymous]

Anonymous wrote: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.

You are amazingly ignorant. I suppose you don't get the concept that for each point in rate increase, it decreases your buying power by X. Therefore you KNOCK buyers out of their affordability zone with each increase. It is called the "cost of money". People in DC have money, but it is not infinite.

I also suppose you have not heard the news that the day of reckoning is comming for the hundreds of thousands (maybe a million plus) defense contractors in the region. Defense spending is getting slashed and MANY high paying jobs are going to be impacted in this area. Furthermore, those people who will lose their high paying jobs will not be spending money and those left with jobs will be in fear TO spend money. Once defense spending gets significant cuts and those primo secure jobs go away or become scace, DC will feel the pain of the rest of the country. Even if you are a teacher, lawyer, painter, or professional photographer, you will feel the stings of these cuts.

[Anonymous]

We are trying to sell our house now for a 30k plus loss and we just can't seem to do it. We're weighing whether we want to take an even bigger hit now or continue to lose in dribs and drabs with a renter. For us, we're willing to take a 40k loss just to be done with it and move on (we've already left the area and bought another house). It just sucks though. But obviously we never could've predicted that we'd be in this predicament.

[Anonymous]

Anonymous wrote: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.

Your "analysis" fails to factor in the doubling, tripling, or even quadrupling of home prices in this area over the past decade. The last time mortgage rates were at 7-8% was in 2002, before the housing bubble. The only way home prices could skyrocket as they did between then and now was due to low interest rates and no-interest, no-money-down mortgages. If and when mortgage rates rise, house prices will have to fall or no one will be able to buy them. We have a long way to go before house prices are back in line with median incomes and normal, sustainable mortgage terms.

[Anonymous]

[b]


OP Here: I just wanted to clarify, the house that we would want to move to to lower our mortgage would be about $200K less than the cost of the current home we are in. Therefore we would be paying about 1,000 less each month on mortgage+insurance. We would be taking a $30K hit on the sale of our current home. We would not be moving to buy a home $30K less than our current one.

[Anonymous]

Anonymous wrote:[b]


OP Here: I just wanted to clarify, the house that we would want to move to to lower our mortgage would be about $200K less than the cost of the current home we are in. Therefore we would be paying about 1,000 less each month on mortgage+insurance. We would be taking a $30K hit on the sale of our current home. We would not be moving to buy a home $30K less than our current one.

I would sell as you would recover in 30 months. If you are planning on staying put in the new house for more than 3 years, then you will be ahead of the game.

[Anonymous]

You have already made the loss. The question is whether you accept the loss now or continue to carry it on your books in the hope that it someday goes away. It might do, if house prices recover, but it very well may not.

If I were you I would take the hit now and move to the cheaper house.

[Anonymous]

Thanks everyone, this is really stressful and I feel like we lost alot during this economic situation, as I am sure alot of people did. We took a layoff and now this. Just want to feel like our luck isn't all bad.

[Anonymous]

We are in the same situation. We bought a condo during the craziness and if we were to sell we would take a loss. Once our family started to grow we realized we need a bigger house so we now rent our condo and bought another house futher outside the city. The rent used to cover the mortgage until just recently when our interest only mortgage now includes principle. I have to say you got me thinking about whether it would just be worth it to cut our losses. Being a landlord can be a pain, but I guess I am just hopeful that one day things will turn around and that we can actually make money on this property.

[Anonymous]

We just did this. Took a $35K loss on the house, but with low interest rates and being a buyers market, we got a better situation and will come out ahead in the long run. The price of our new house is much lower than it would have been 12 mos ago. We have a slightly larger house, with better schools for long-term (10 year) living. Our mortgage is $100 more per month on the new house than what we were paying on the old, so basically an even trade on cost of living for a much better overall situation. The way we look at it, our new house cost $35K more than the price we paid, but a 12-18 mos ago, we figured this kind of move would cost $100K in increased mortgage.

[Anonymous]

Take the hit and move to a home you can afford. Really afford. Not just the mortgage, but the maintenance. A real mortgage. Fixed with money going to principal.

OP - 30k is nothing in the scheme of your life. Think how much it will suck in a few years when you explain to your kids that they have to go to NOVA because of all the money you paid each month so that they could live in a pretty house.

[Anonymous]

No. We bought our first home in the height of crazy DC real estate market (July 2004)....we had put multiple bids with escalation clauses on about 10 prior houses and they'd get sold to someone else within minutes. We were determined not to escalate more than what WE thought the home was valued at. I think that principle,,,plus finding a FSBO that most of the realtors wouldn't show (we didn't use an agent) is the main reason. It is a rowhouse in Georgetown with comparables selling now for about $50-75k more than what we originally paid. We are keeping it as an investment anyways so long term outlook is good. Already renting about $700/month more than our mortgage on it.

[Anonymous]

Anonymous wrote: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.

You're so right. My parents had an 8% mortgage. They afforded it fine on their dual-gov't salaries. Of course, the only paid $60,000 for the house, but that's a minor detail that we can afford to ignore for the sake of this discussion.