Should i sell my first home now?

**manatbay** · 10-13-2009, 09:17 AM

We bought our house in June 2007 for 179.9k and have it down to 174k principal; the plan was initially to sell the house in 5 yrs from purchasing to jump to a new house with our refined 'must have' list for ~250k. Now with the recession still burning strong and the government digging a larger hole of debt i was thinking of moving the sale of our first house to next spring and moving to an apartment and saving the difference of rent to mortgage for 2yrs or so... at which point i would purchase the second home with 20% and possibly get a great deal for buying in a slump. Any opinions or thoughts on what action seems most appropriate? Thanks,

**manatbay** · 10-13-2009, 12:55 PM

Does anyone have any experience with this?

**Glennet** · 10-13-2009, 01:48 PM

Hello-

While you provided some basic information - you left some rather large gaps for consideration.

For instance:

- Are you sure your not upside down with your mortgage - and can get out with a price that will cover your loan balance.

- Where are you located ? Real estate is a local business and you may be in an area that recovers quickly from this recession.

- What will your current home be worth in 2 years ? Could it appreciate enough where your anticipated savings from renting would be negligible.

- What makes you so sure the market won't bounce back in your area and you would miss out two ways - One from the appreciation from your current home and Two the unanticipated higher price of your dream home.

There are a few other points I could bring to bear - but unless your really having a problem making the mortgage - you may be over thinking the issue a little.

Relax - enjoy your home for what you bought it for in the first place and enjoy the American dream.

One thing I would suggest - sounds like you did 100% finance - so contact your lender and try to get some rate reduction on the 2nd anyway.

Your gonna need some excuse to get them to listen - like less overtime at work, unanticipated medical or other emergency expenses, etc. You sound like a real thinker so I'm confident you can figure out something to get the bank to listen to you. A suggestion - I'd leave the federal budget deficit excuse in the bag. Don't think that one would work.

In any event -
Good Luck
Glenn

**manatbay** · 10-13-2009, 04:54 PM

Thanks Glennet,

One thing I would suggest - sounds like you did 100% finance - so contact your lender and try to get some rate reduction on the 2nd anyway.

I only have 1 loan, and yes it's at 100% and it's through USBank whom try to charge me 1k to tell me i couldn't refinance 5 months ago... long story short; no houses in my neighborhood had been up for sale in a while so the appraiser selected bogus sample homes (in one case 5 miles away) and i live in a urban area...

Are you sure your not upside down with your mortgage - and can get out with a price that will cover your loan balance.

it's hard to be positive on this one, Zillow lists my house as 206k and i owe 174k... so i hope so.

- Where are you located ? Real estate is a local business and you may be in an area that recovers quickly from this recession.

Spokane Valley, Washington; Spokane isn't recession proof by any means, but the effect has been staggered.

What makes you so sure the market won't bounce back in your area and you would miss out two ways - One from the appreciation from your current home and Two the unanticipated higher price of your dream home.

Playing the other side; what's to say it will? The "economic recovery" plans that are being executed may in themselves delay complete recovery. Politics aside, but we may need to recover from the recovery.

**Moore** · 10-14-2009, 04:46 AM

i had the same problem some weeks ago and i decided not to sell the house right now and just till some better times. My family agreed with me, though we are really eager to move a new house. But the situation is not good!

**Nick Brian** · 10-15-2009, 11:29 PM

Hi don't depend on Zillow. Price list there isn't reliable. Don't get self satisfaction doing that. Secondly talk to your agent for a quick recovery. Start acting now.

**manatbay** · 10-22-2009, 09:03 AM

Thanks for everyone's input, this is a big decision i don't take lightly. Zillow is definitely not a reliable reference when it comes to brass tacks and i need to get with a real estate agent for an appraisal, but here is my logic;

The first time home buyers credit ends end of nov and that will help sell our house, the market in Spokane is gonna drop another 10% over 18months... so even if we break even on the sale, move into an appt for 6 months, and get a house with PMI we will save a bundle of money; the house we want is ~250k, normally ~290k and in the spring it could be ~225k.

What do you think?