Thread: Should I Sell my current house?

Originally Posted by pf39

Hello everyone,

I am hoping someone can give me an advice on what I should do. I bought my condo in 2004 in Lorton, VA for $250,000. However, the condos in the area now are selling for 240, 235, 219. My dilemma is giving the fact that the prices are dropping faster than I espected, I what to sell the condo at a loss, and then buy a townhouse or a single family home. The houses in the next exit from me in Woodbridge are selling for 275,000 for a two-year-old town house. I can sell mine for 240, however, adding the fees and taxes can push the losses to $30,000. Anticipating that I can gain that losses from buying another house is my reason for the intended move.

From your experties, do you think this is a good idea? Please help.

Papa

If it were not for the fact that you already understand you are going to take a loss I would tell you now is not the time to sell. Since you understand this I will give you advice on how you should go about it if you choose to do so. At the rate prices are falling (especially on condos) in your neck of the woods you need to list at a price below current comps. or you will end up chasing the market down. So, make sure you are ready to take a larger loss than you have quoted and get it in a strong contract within 30 days. Don't just take any offer that shows up that price looks good for make sure that you look at the financial strength of the buyer. If you choose to take an offer contingent on the sale of your buyers home only do it if they have a sale gaurntee on their property. Some agents do this and one real estate firm offers this that is ERA. They are a franchise and will buy the principals home if it has not sold in 6 months. Now I would only suggest that you sell if you figure that you will end up needing more room in the near future or prices for homes are softer in the price range you plan to buy into then the one you are selling in. Example 250,000 and below are dropping in price at 3% per year homes above 250,000 are dropping in price at 4%. This will allow you to sell your home and then buy a new one in a matter that will minimize your losses. Just remember if you do this you will take a loss. Make sure you are ok with this and if you are go for it. It really is a great time to buy. You might find a price that in the future you will not be able to touch.

Good luck and if you have any more questions or would like me to clarify part of my post just PM me.

Jamesww,

Thank you very much for your response and advice. I had some reservation about the amount of money I may loose if I sell the house, but I figured $30,000 is not that bad. However, loosing beyond $30,000 can be problematic. The next option for me is to rent my place out and buy another one. The issue with that is whether I will be able rent it out for the amount I am currently paying. My mortgage is $1865 a month, plus untility of about $200 a month and condo fee of $200. I will be willing to pay for the condo fees in order to keep the rent down. My place is really nice. It's 1220 sq feet, 2 br and 2br with fireplace and a front yard.

What would you think about the idea of renting instead of selling? Cause you are right, now is not the time to sell unless under extreme circumstances. However, I just don't want to loose the opportunity of buying another house for reasonable price since I may need a bigger house down the line. The only other fear I had that is inducing me to sell my place is the fact of loosing equity larger than I can accept.

your response I grately appreciated.

Originally Posted by pf39

Jamesww,

Thank you very much for your response and advice. I had some reservation about the amount of money I may loose if I sell the house, but I figured $30,000 is not that bad. However, loosing beyond $30,000 can be problematic. The next option for me is to rent my place out and buy another one. The issue with that is whether I will be able rent it out for the amount I am currently paying. My mortgage is $1865 a month, plus untility of about $200 a month and condo fee of $200. I will be willing to pay for the condo fees in order to keep the rent down. My place is really nice. It's 1220 sq feet, 2 br and 2br with fireplace and a front yard.

What would you think about the idea of renting instead of selling? Cause you are right, now is not the time to sell unless under extreme circumstances. However, I just don't want to loose the opportunity of buying another house for reasonable price since I may need a bigger house down the line. The only other fear I had that is inducing me to sell my place is the fact of loosing equity larger than I can accept.

your response I grately appreciated.

pf39,

If you can handle upto a $40,000 loss to get into a larger home that you can afford it might make sense for you to do it. Just make sure you price your condo below the comparable sales for units like yours. So, that you do not end up chasing the market down because getting into that situation can make you do stupid things because of how emotional it can get for people when selling their homes.

As for renting if you do it right it can end up well for you. I do not know what rental rates are for your area so I am unable to completely answer this question for you. I would suggest using rent to own strategies to help assure the unit is cared for. If you have questions on how to do this private message me.

James you have a very good idea, I may suggest the same thing. but what can Is say?you explain it well.

for me if your really need the money then sell it...but if you got the money and you know that its a lost to sell it right now then...why sell it..

James and contributors,

Thanks you for your insight about my situation. As James mentioned, selling my condo and buying a larger house would be a more reasonable thing for me. I love my condo, but I cannot see it's price going beyond 250 anytime soon and even if it did, my equity on it will not reach $50,000. Whereas if I sell this house for 239,00 a loss of 16,000, plus 6% for realtors, for lets say $15,000, so $31,000. If buy a townhouse for $275,000, adding $31,000 will cost me $306,000. In a few years, the townhouse could appraise to $400,000. That is my thinking.

Now, James, you mentioned selling my house below the comparable sales for units like mine. Units like mine are selling at $239,988--the last unit I see on the market. what price would you suggest I come in to the market with?

Thanks again guys for your great insight.

Papa

Originally Posted by pf39

James and contributors,

Thanks you for your insight about my situation. As James mentioned, selling my condo and buying a larger house would be a more reasonable thing for me. I love my condo, but I cannot see it's price going beyond 250 anytime soon and even if it did, my equity on it will not reach $50,000. Whereas if I sell this house for 239,00 a loss of 16,000, plus 6% for realtors, for lets say $15,000, so $31,000. If buy a townhouse for $275,000, adding $31,000 will cost me $306,000. In a few years, the townhouse could appraise to $400,000. That is my thinking.

Now, James, you mentioned selling my house below the comparable sales for units like mine. Units like mine are selling at $239,988--the last unit I see on the market. what price would you suggest I come in to the market with?

Thanks again guys for your great insight.

Papa

From what I have read about the D.C. area condo prices have fallen 8.9% in the last 6 months and that the D.C. area is experiencing accelarating rates of decline. This tells me that you should price 2% below average sales price for similar units per month from your comparables. If the condo is advertised correctly this should allow you to get a contract in 30 days. I don't want to cause you to get nervous or anything but if you don't get a strong contract in this amount of time you will recieve less than you could have for the unit. I would suggest that you use an ERA office to market your condo and that you should ask for their seller's advantage. This will asure that you get a price at least 90% of what ever the current appraised value is. I know that there are limits on what properties will qualify one being it must be a single family home. Condos are generally considered to be single family but sometimes they get labeled multifamily. So, your unit may not qualify but it is still worth trying to get on the plan if possible. I have included links below for you to educate yourself on the seller's advantage program and a link on the rate of declines in your area.

http://www.era.com/erasell/ssp.html

http://bubblemeter.blogspot.com/2008...ing-price.html

I further suggest that you get a current appraisal and a home inspection so that you can fix anything that is wrong before listing along with knowing the most current value. Pricing between $5,000 and $10,000 below the appraisal and market as such should help get it sold. I would start the first two weeks at the lower number and see what kind of traffic you get. If you are not getting much traffic then make a price reduction. Make sure the agent you choose will agree to spending 1% of the list price for marketing and if they do not spend the 1% then they will credit the difference to you at closing. If I was you I would sign a 6% commision listing and require that 3.5% is offered to the agent that brings the buyer. Also, pick the appraiser from a list of one of the commercial banks in your area this will assure that you get a honest appraisal similar to what a bank will see when they are giving the loan. If you are not willing to do all this just stay put and wait for the market to come back around because going through the selling process in this kind of market just isn't worth the heartache if you don't sell. I wish you luck and hope that by listing a little low you get a bidding war to push the price up to full appraisal.

I would encourage you to not sell, and rent the property out. This will allow you to weather the market and sell when things improve. You can take the rental income in determining if you qualify for the next property. Don't sell, rent it!

hello minnesota-mls, hello James,

Thank you for your input. I have decided not to sell but rent instead. I think the stakes are higher in terms of loosing if I sell now. I am hoping that I will be able to rent it for the amount I am paying towards my mortgage and then aborb the cost of condo fees of $200. I looked at the rental costs in my area, the range is between $1400 to $2000 at the high end. Thanks all for you insight and input.

papa