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House buying/selling question
Sorry if this is a dumb question, but while "we" own our house, DH actually bought it when we first started dating so I've never been a part of the house buying process. We would like to move to a SFH in the next few years but we bought our townhouse in 2006 so we're kind of screwed.
DH is convinced we'll die in this house because we'll never be able to sell it and I think he's being overly dramatic. The last tax assessment value of the house was about $50k less than what we paid for it (which sucks, admittedly) and I've been told that we wouldn't be able to sell it for what we paid for it (or even what we owe on it) because that is so much more than the assessment value and a bank wouldn't approve a buyer's loan for that high amount. Is this right? Our neighbors recently sold their house for about $40k more than the assessment value. Can some one explain this to me?
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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Re: House buying/selling question
Assessment does NOT equal appraised value
That is all that matters! If the house appraises it doesn't matter what the assessed value is showing. The way appraisals are ordered now, you don't typically get the inflated values showing on the appraisals like you did years ago.
There is definitely more to it than I just explained depending on diff scenarios, but for sake of adding a ton of info that's the short and skinny.
Ditto PP. But you are correct in that a bank will not approve a loan for more than an appraised value.
You can always look into what we ended up having to do, which is rent out and buy. It wouldn't hurt to contact your mortgage person and ask what you could currently afford. You might be pleasantly surprised. They don't factor in the fact that you'll be getting rental income. And I know a few people who are doing exactly what we did and have their mortgages on the first place fully covered.
Can you do a search on a site like franklymls and see what houses in your neighborhood have sold for? that might be a good start.
And FWIW we are in the same situation. I want a SFH so so badly.
Same here! I think we are going to have to wind up renting our house out. That's what a lot of people in our neighborhood are doing and sadly, it is making it go downhill fast.
Thank you both! Okay, I asked about an appraisal because we have made improvements, etc. That makes sense.
Renting out is a possibility. I think DH would like to do this, but I'm not sure if we could swing it and also come up with a DP on a new house.BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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Yes, well at least that's what it was a year ago, when we bought our 2nd house.
ditto squared. Unfortunately I don't think we could afford to rent out our house, rent would not equal mortgage payment.
DH is hell bent on putting 20% down and while that would be ideal, that's a freaking lot of money to come up with. We'll have to see.
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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Houses in our neighborhood are selling for about what we owe on ours.
The thought of 2 (or more) kids in our current house terrifies me. But it probably won't be until after #2 that we buy a new house.
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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quatritto?
I feel like everyone in our general demographic is getting screwed this way. We can pay our current mortgages so we aren't getting foreclosure assistance yet we can't afford to ever move into a "real" house without serious financial decisions and risk. Not to mention additional time and, often, expense.
Our plan is probably to rent out, at least for awhile. And 3 out of 3 of my best friends who have already moved their TH/condo into a SFH have done exactly that. We're all being set up to be landlords which is not nearly as fun or as easy as The Ropers and Mr. Furley make it out to be.
Our Share of the Harvest:How a couple cooks from a CSA share. Pick Up Day Week 15
DH dreams of owning one house and renting out another but he wants to do it because he thinks we'll make money on it, which we really wouldn't. I don't know what the going rate for rent would be on a house like ours (anyone know how to find this out?). Our mortgage is really affordable, but I don't know. Also, there are maintenance costs for both houses, plus insurance...I don't even know what's all involved in being a landlord.
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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We are looking into refinancing right now so that renting it out might be a possibility in the future, but unfortunately after #2.
My mom rents out her TH in our area and the realtor that rents it helped her set the amount of $ to rent it out for.
We use a management company for DH's dad's house that we rent out. After renting to one couple who TRASHED the place and skipped out on $1000's of rent payments and another couple who lost their jobs and DH didn't have the heart to kick out (again, $1000's in rent lost), our property manager has been a lifesaver.
She takes the first month's rent and 10% after that but she negotiated a higher rent than we were getting on our own, did all the advertising, showing, background checks, paperwork, rent collection, communication, inspection, mediation, and arbitration. She went to rent court for us with proper documentation when our current tenants failed to pay. We have to pay for repairs but she organizes everything and follows up. The tenants don't have our personal phone numbers or address, she handles all of it.
It's been wonderful having someone do all of this for us and her monthly fee was fully covered by the extra rent she was able to negotiate. If you do decide to rent out, I'd HIGHLY recommend working with a management company.
Our Share of the Harvest:How a couple cooks from a CSA share. Pick Up Day Week 15
This sounds like the way to go if we wanted to rent. I'd never want to manage the situation myself!
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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DE IVF #1= 04/11 - BFP
You could reach out to a local realtor and have them pull comps, do a walk through of your house, and do a whole analysis of what you would get if you sold the house for X, Y or Z.
We did this a few months ago when we viewed a larger version of our house for sale in our neighborhood.
It was educational, if nothing else. Unfortunately even with numerous improvements she still thought it would be difficult for us to sell our home for more than we paid for it in spring 2008.
We may have to do this when it gets closer to the time we want to buy. I don't have any illusions about getting back what we paid for it, but I'd like to get what we owe which, based on other sales in the neighborhood, should be reasonable.
BFP#1: 01/10, M/C 6w -- BFP#2: 06/10, M/C 5w -- BFP#3: 09/10, DS born June 1, 2011
BFP#4: 07/12, M/C 5w3d -- BFP#5: 12/12, EDD 08/18/13
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