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If you really want to move, then you might want to consider turning your house into a rental. I've no idea what the rental market is like in your area, but it's a way to avoid selling for less and coming in with additional monies. If you can afford to do that, then you may be able to swing renting your house out for less than your mortgage. Ideally, you want any income property to pay the mortgage and more, but it doesn't always work out that way. If nothing else, the loss is a tax write-off. Anyway, rent it out while the market does its thing. You may be able to come out ahead that way.
Really,? Explain. No one should be buying something they can't afford and should be paying the same monthly they do in rent, when they DO find something they can afford. So if you get "laid off" from a job, are you going to stop paying rent?, for your car/s, and any other "debt" you have? This logic, or lack there of, always amazes me when it comes to the rationality of home buying.
You can break your lease and move to another state easier than you can with a mortgage. Or maybe I'm completely off base if you don't see that point. I thought it as obvious.
Really,? Explain. No one should be buying something they can't afford and should be paying the same monthly they do in rent, when they DO find something they can afford. So if you get "laid off" from a job, are you going to stop paying rent?, for your car/s, and any other "debt" you have? This logic, or lack there of, always amazes me when it comes to the rationality of home buying.
It's not the same. You have much more flexibility if you rent, and there is a finite amount of money that you can lose if you have to move out early for any reason.
We sold our house a year and a few months ago, and have 4 months left on our lease. We are agonizing over whether to buy, or whether to keep renting. It's a tough call, because I have owned a home since I was 18, and never owned a single one of them for longer than 3 years. Most we have owned for less than 2 years (and we've paid the capital gains to prove it!).
It's tough to buy knowing that you may need to stay in the house for 6 - 10 years just to break even. Prices are not dropping too much here although inventory is not really moving either. We will not buy anything unless we get a DEAL. Even then it would be scary.
I never thought that I would feel more comfortable renting because I enjoy owning, but this economy is scary and it's not easy to make the commitment.
I hear so much about the mortgage crisis, foreclosures and potential bailouts. But, I'm wondering are there any other homeowners out there who are bailing themselves out?
We bought our first home 2 1/2 years ago in a nice (yes, really) Cleveland suburb, at the top of the market as it turns out. Prices here didn't seem too inflated, and we wanted to be in a home before our first child was born. Yes, I was nesting! We bought well within our price range, probably half what we could have qualified for. Now, needing to be closer to my dad as he gets older, we've decided to move. We put $25,000 into a finished basement and are now listed $10,000 below what we paid. We've done everything possible for our home to show like a model home, but have had no offers. It looks like we'll have to bring at least $20,000 to close, if we ever even get an offer. We will have to empty out all our savings, or maybe take out a loan to pay off our mortgage. And we can thank greedy/irresponsible lenders and buyers for this decline in home values. The responsible people are, yet again, stuck paying for the mistakes of others. When are we going to reward responsibility instead of penalizing it? Rant, rant, ,rant...
What about moving your dad closer to where you are living now?
You said you paid $25K in improvements and will have to bring $20K to the table at closing, and you lived in the house for 2.5 years. In other words, you will have paid $45K over 30 months for having lived in the house, which works out to be $1500 a month.
You said you live in a very nice area in Cleveland. Would you have paid $1500 a month to rent this type of house there?
Remember, had you rented instead of bought, that money would be lost, too...
You said you paid $25K in improvements and will have to bring $20K to the table at closing, and you lived in the house for 2.5 years. In other words, you will have paid $45K over 30 months for having lived in the house, which works out to be $1500 a month.
You said you live in a very nice area in Cleveland. Would you have paid $1500 a month to rent this type of house there?
Remember, had you rented instead of bought, that money would be lost, too...
But, that's $1,500 a month in losses, plus what we paid in mortgage/taxes every month! By my rough calculations, with closing costs on both ends, improvements, drop in price and adding back in what we would have spent in rent, it'll be about a $60,000 loss overall. But, I'm counting my blessings. At least we're not in an area of the country that saw huge drops, then we wouldn't even be able to move.
As far as moving my dad closer, it's really not at the point that we need to do that. He's still very independent. I just wanted to be closer just in case he needs us, and since he's all alone out there. And the move takes us closer to all our family which will be a good thing anyway.
And we have two more showings this weekend, so I'm absolutely sure we'll get an offer this time!
You can break your lease and move to another state easier than you can with a mortgage. Or maybe I'm completely off base if you don't see that point. I thought it as obvious.
And if you're that unsettled in life that you can just "pack up and leave" then homeownership was never in the cards in the first place. Most of us don't live like gypsies, renting or owning. But then maybe I'm wrong. Job loss is tragic, no matter what your "living arrangement" is and most people have a lot more than just paying a monthly for wherever they live to worry about. And breaking a lease, especially in these markets, has their consequences too. So does getting approved for another one, especially with no job.
And if you're that unsettled in life that you can just "pack up and leave" then homeownership was never in the cards in the first place. Most of us don't live like gypsies, renting or owning. But then maybe I'm wrong. Job loss is tragic, no matter what your "living arrangement" is and most people have a lot more than just paying a monthly for wherever they live to worry about. And breaking a lease, especially in these markets, has their consequences too. So does getting approved for another one, especially with no job.
Sensibility goes with responsibility. Perhaps you don't understand that. There were several who lost their jobs over the years, especially back in 99-2000 when the "dot com" industry and the stock market took a dive. And many of these owned homes, still do, and weathered the storm. That's because they saved, as responsible people do, and had a reserve fund for this possible misfortune. They agressively looked for another job, where they were, and kept their families "HOME". Any financial advisor will tell you (and most know from their own common sense) you MUST have at least 6 months worth of savings that equal what it would cost you to live, if you should lose your job or become unable to work due to illness or injury! As I said, there is a lot more, in most cases, to worry about than whether you can pay your rent or mortgage. And by the way, owning allows you to have mortgage insurance that covers your payments, in the event of a job loss- renters don't. If job hunting involves moving out of state, then you should be able to do that while you pay your mortgage or rent, if you live "sensibily". Most look for another job where they are, at least in our Metropolitin area. So your "rationality" for why someone are affraid to buy? (because what if they lose thier job?) Another excuse that was never thought of, until this market became what it did. If we all haulted decisions on the "what ifs", we'd never get anywhere in life. Does this make enough "absolute sense" for you now?
What most people fail to recogonize is the large amount of money it takes to keep hanging onto that mortgage for an addition 3, 6, or even 12 months. $1,800 a month payment pluse all the 'average' utilities would put this example at nearly $30k per year.
Owning is different than renting since you have property taxes, more utility costs, and have to pay for necessary repairs. Telling someone whose house is on the market they should have rented isn't helpful.
I recently sold a house at about the same price I bought it for 18 months later. It isn't fun bringing money to the table but I didn't want to wait out for months for a higher offer while I continued to pour money into my mortgage.
If you're getting 30+ showings and not a single offer, it's priced right but something is scaring away buyers. Potential buyers already like the area and like the pictures of the house. Check with your realtor for feedback from the showings.
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Selling at a loss?
