If you leave a house with a dated kitchen and bath for a townhouse with new finishes, then you are just buying into another depreciating asset. You have to be willing to update the inside of the townhouse, or you will be losing money again when you sell a dated townhouse a few years down the line. Make sure that you aren't just moving for new and shiny. It's cheaper just to update your current place.

How old are you - if you have kids in the future then you might want to keep that house and have it be your "forever home".

Anonymous wrote:

Anonymous wrote:We bought for 750K in 2011, and the house is too big for our needs and yard work is way more than we anticipated.
We can move to a 550K townhouse and it has better schools, more compatible community/neighbors and minimal yard work.

If we sell now for 750K (worst case), we take a 65K loss due to realtor fees, paint, carpet etc. Our mortgage is 200K, and we net 485K. So new mortgage will be really small ~65K.
This will lead to a saving of $600 per month on mortgage (65K vs 200K) and another $500 monthly savings on upkeep (utilities, property tax etc) on the smaller TH. So saving of 1K per month, 12K per year. Plus the improvement in quality of life.

So in 5 yrs we would have gained back the 65K lost.

Does this calculation make sense, or should we just wait for it to appreciate so we can break even on the purchase price after the selling costs?

Are you sure that's all you'll lose? Have you had your house appraised recently?

OP here, yes, why do you say that? I am doing a refinance, and it appraised for 758K last month, I am actually hoping to sell for 10-15K more as comps in the area have sold for more recently.

Anonymous wrote:We bought for 750K in 2011, and the house is too big for our needs and yard work is way more than we anticipated.
We can move to a 550K townhouse and it has better schools, more compatible community/neighbors and minimal yard work.

If we sell now for 750K (worst case), we take a 65K loss due to realtor fees, paint, carpet etc. Our mortgage is 200K, and we net 485K. So new mortgage will be really small ~65K.
This will lead to a saving of $600 per month on mortgage (65K vs 200K) and another $500 monthly savings on upkeep (utilities, property tax etc) on the smaller TH. So saving of 1K per month, 12K per year. Plus the improvement in quality of life.

So in 5 yrs we would have gained back the 65K lost.

Does this calculation make sense, or should we just wait for it to appreciate so we can break even on the purchase price after the selling costs?

Are you sure that's all you'll lose? Have you had your house appraised recently?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't count the paint and carpet in your "loss." You would have spent something on any house you bought, in all likelihood.

OP here, yes, but I have 2 cats who spit up regularly (IBD and thyroid) and one of them loves to scratch and pull out the carpet fibers, so if we dont sell within weeks of the new carpet, that will be money down the drain. Same for the wood floors. And with the baby, the painting seems to be a huge hassle with all the fumes.

But I guess we have to do what it takes, and hoping the realtor will make it relatively easier.

Stay in the house! That baby is going to be a kid who wants a yard, not a tiny townhouse.

Thanks, but not us, we are lazy homebodies. My older kid likes the yard but not too keen. He prefers long walks now and the playground when younger.

Anonymous wrote:

Anonymous wrote:Don't count the paint and carpet in your "loss." You would have spent something on any house you bought, in all likelihood.

OP here, yes, but I have 2 cats who spit up regularly (IBD and thyroid) and one of them loves to scratch and pull out the carpet fibers, so if we dont sell within weeks of the new carpet, that will be money down the drain. Same for the wood floors. And with the baby, the painting seems to be a huge hassle with all the fumes.

But I guess we have to do what it takes, and hoping the realtor will make it relatively easier.

Stay in the house! That baby is going to be a kid who wants a yard, not a tiny townhouse.

Anonymous wrote:Don't count the paint and carpet in your "loss." You would have spent something on any house you bought, in all likelihood.

OP here, yes, but I have 2 cats who spit up regularly (IBD and thyroid) and one of them loves to scratch and pull out the carpet fibers, so if we dont sell within weeks of the new carpet, that will be money down the drain. Same for the wood floors. And with the baby, the painting seems to be a huge hassle with all the fumes.

But I guess we have to do what it takes, and hoping the realtor will make it relatively easier.

Anonymous wrote:if your moving to save money it looks like the margin is to thin and one wrong turn and you may end up in a townhouse for the same price as a single family home. If you would prefer to live in the townhouse, vs the sf then go for it!

OP here, yes thanks. I understand the margin is thin and hence abandoned idea of buying first. But even if we sell first, unless we get the right price and have the correctly priced TH waiting for us on close, we are going to end up with additional expenses than anticipated. On top of it, we have 2 cats and a baby so nervous about all the hassle of paint/carpet and showings.

It is much easier to move up than to downsize!

But yes it is not only for money, though the 150K difference and being mortgage free is a big motivator. I really think a TH will fit us better in terms of lifestyle, neighbors and schools, and it will be a bit newer as well so less maintenance and more convenient (upper level laundry, closed commode, newer fixtures, gas fireplaces etc)

10 years ago I hated a new TH and craved for a yard and a house with character, and now I am doing a complete 180.

Anonymous wrote:

Anonymous wrote:Don't use a traditional realtor and save yourself $18k through reduced commissions.

Please ignore this advice.

Definitely interview a rebate agent, but you really need to choose the best agent with the best marketing plan, not fixate on how much they are compensated. So many fools on this board.

If the rebate agent saves you $18,000 on commission but a traditional realtor gets you $20,000 more for the house, which would you go with?

If the rebate agent nets you $20k more AND saves you $20k on commission versus the traditional agent, who would you go with? (From my own, actual experience)

Anonymous wrote:

Anonymous wrote:Don't use a traditional realtor and save yourself $18k through reduced commissions.

Please ignore this advice.

Definitely interview a rebate agent, but you really need to choose the best agent with the best marketing plan, not fixate on how much they are compensated. So many fools on this board.

If the rebate agent saves you $18,000 on commission but a traditional realtor gets you $20,000 more for the house, which would you go with?

Marketing plan? Almost all buyers look on redfin first to narrow down their homes? The market determines the price the house will sell for; a fancier set of balloons is not going to command another $20k.

Also, the $18k commission rebate is guaranteed; you are banking on having a great agent to $20k boost -- but how do you identify that mythical realtor? Lake Wobegon here, all realtor's are above average.

Anonymous wrote:OP, don't forget to factor in the lost of the mortgage deduction credit on federal taxes when going from 200K to 65K in your annual calculation.

Not saying don't do it though.

There's no such thing as a mortgage deduction credit. There's no such thing as a "deduction credit" period.

There's a deduction for mortgage interest. But there's no credit.

Anonymous wrote:Don't use a traditional realtor and save yourself $18k through reduced commissions.

Please ignore this advice.

Definitely interview a rebate agent, but you really need to choose the best agent with the best marketing plan, not fixate on how much they are compensated. So many fools on this board.

If the rebate agent saves you $18,000 on commission but a traditional realtor gets you $20,000 more for the house, which would you go with?

Don't count the paint and carpet in your "loss." You would have spent something on any house you bought, in all likelihood.

Anonymous wrote:

Anonymous wrote:Don't use a traditional realtor and save yourself $18k through reduced commissions.

Thanks but how? We have never sold a house before.

I've spoken to Paul Thistle who does 3.5% listings instead of 6%: http://www.take2realestate.com/
He seems passionate about helping people and his listings have good pictures: http://www.zillow.com/profile/take2realestate/

I've also spoken to i-agent and GlassHouse. I think they'll both bring down their listing commissions to 1% if you ask.
http://i-agent.com
http://www.glasshousere.com

Redfin also does 1% listings but it sounds like you're looking for more personal attention than you'd get from them?

Unfortunately there are no buyers registered here in your price range YET:
http://www.knockity.com/DearOwner/Andrew_22/Share/438d41d1-6fcd-4b5c-b417-45a94674f2ac
http://www.knockity.com/DearOwner/Gaby_59/Share

Anonymous wrote:No, not currently much interest in savings. Read Janet Yellen's response to Nader yesterday on precisely this (Bloomberg.com).

Factor in opportunity lost costs, too OP. If the opportunity gains from getting out exceed staying, then it may be time to take the loss.

No one knows tomorrow's future in the housing market. Not even our overconfident county/city tax assessors and board or council members.

I meant that she could invest the money they save. So she can have a $750k house as an investment or a $550k townhouse as an investment plus $200k left over to invest in some other vehicle.