SOS: I Have a Buyer — Finally — But I’ll Only Net $3,000!

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A Reader who has had her house on the market for over a year writes:

Dear Candy:

It has been a nightmare trying to sell my home in Prosper. I’m a single mother of two. I paid about $280,000 for my home 2.5 years ago. Been on the market for two years. One buyer came in and backed out at the last minute, after I’d signed a lease on a rent house. (That was costly!) Now we have another buyer at $263,000 on a $275,000 asking price. I put $40,000 down on this home and with this offer, will only net $3,000. That’s a lousy investment on $40K. It’s a solid buyer, all pre-approved, clean deal and they are paying all fees. I just don’t know what to do! Do you think home ownership is worth it? Everyone keeps telling me that they are going to take away the tax deduction, and I should just sell and lease. What’s the real story? I need a real estate expert? I’m afraid my agent wants me to sell just to get rid of me and make some money off me.

Thanks,

JH

Dear JH,

Wow, that’s a tough call. I still believe in investing in real estate now, maybe more than ever, but only if you can afford it and hold it for the long term. The market is improving, but disasters keep happening — Japan, Libya, the Middle East. There are signs of inflation everywhere but in housing it seems, and that’s because of all the foreclosures and short sales out there.

I think that if you need to sell, you should take this offer, maybe counter at $269,000. I think you should be happy you will not be taking your checkbook to closing but will, instead, get a check, no matter how small. Think of it this way: you lived in the home and it only cost you $11,000 (assuming you sell it at $269K) plus maintenance for 2.5 years. That’s $366. per month, and that’s not figuring in your tax benefits, if any. (Some folks don’t enjoy the mortgage deduction thanks to the Alternative Minimum Tax.) So you have a nice home in Prosper with great schools for less than $400 a month. Houses are not ATMs.

Are you secure in your job? Can you hold off for another year? It’s a gamble, because while the market may get better, it could get worse and interest rates could go up. Personally, I think prices will stay flat for several years (sorry) and there is an election coming up, which throws in yet more variables. So you could stay in your home,¬† knowing you may make out the same in a year or even two. It really depends on your situation.

Why don’t you map out a “worse case scenario” if you stay in your home, worse case if you move out. Renting is a great idea if you want to be flexible — someone today at an Urban Land Institute Meeting said Paris France is a city loaded with apartment renters. But don’t give up on housing for the long term. I hope this helps. I really wish I had a crystal ball for you!

Now we need to ask the SecondShelter community what they think you ought to do!

By the way, Darling Homes is raffling off a brand new home in Prosper — check it out!

mm

Candy Evans

A real estate muckraker, Candy Evans is one of the nation’s leading real estate reporters. She is also the North Texas real estate editor for Forbes.com, CultureMap Dallas, Modern Luxury Dallas, & the Katy Trail Weekly. Candy has written for Joel Kotkin’s The New Geography, Inman Real Estate News, plus a host of national sites. Constantly breaking celebrity real estate news, she scooped former president George W. Bush's Dallas home in 2008. She is the founder and publisher of her signature CandysDirt.com, and SecondShelters.com, devoted to the vacation home market. Her verticals have won many awards, including Best Blog by the venerable National Association of Real Estate Editors, one of the nation’s oldest and most prestigious journalism associations. Candy holds an active Texas real estate license but does not sell. She is on the Board of Directors of Braemar Hotels & Resorts (BHR).

Reader Interactions

Comments

  1. Jeff Duffey says

    You've lived in your home for 2.5 years. And, according to your post, you've had the home on the market for over a year, which means that you put your home up for sale after only living in it for a year and a half. The fact that you're able to walk away with $3,000 in your pocket is nothing short of a miracle – and only possible because you put a substantial amount down when you bought the home. You should be grateful you're not writing a $30,000 check just to sell your home. Take the offer and run.

    If you want someone to put this in perspective for you, ask the seller who bought their home 2.5 years ago with a 100% interest only loan. They will not understand your indecisiveness, and may even be angry that you're debating taking such an offer.

  2. Jeff Duffey says

    You've lived in your home for 2.5 years. And, according to your post, you've had the home on the market for over a year, which means that you put your home up for sale after only living in it for a year and a half. The fact that you're able to walk away with $3,000 in your pocket is nothing short of a miracle – and only possible because you put a substantial amount down when you bought the home. You should be grateful you're not writing a $30,000 check just to sell your home. Take the offer and run.

    If you want someone to put this in perspective for you, ask the seller who bought their home 2.5 years ago with a 100% interest only loan. They will not understand your indecisiveness, and may even be angry that you're debating taking such an offer.

  3. Jeff Duffey says

    Just re-read the post and saw this, "I put $40,000 down on this home and with this offer, will only net $3,000. That’s a lousy investment on $40K."

    Did you really expect to make a bunch of money on your home when you bought it in 2008 and put it on the market 1.5 years later? Someone has entitlement issues. Would be interested to know if this person is under 40 years old. I'm guessing around 30-35.

  4. Jeff Duffey says

    Just re-read the post and saw this, "I put $40,000 down on this home and with this offer, will only net $3,000. That’s a lousy investment on $40K."

    Did you really expect to make a bunch of money on your home when you bought it in 2008 and put it on the market 1.5 years later? Someone has entitlement issues. Would be interested to know if this person is under 40 years old. I'm guessing around 30-35.

    • Jennifer Hayes says

      No entitlement issues. Grateful for the offer. Sometimes, divorces and other sad things happen and not everyone is an expert about the market and just has questions about waiting or not….That's all. Bought right before all the bad happened and trying to protect myself in case of more future disasters….I am almost 40.

    • Jennifer Hayes says

      No entitlement issues. Grateful for the offer. Sometimes, divorces and other sad things happen and not everyone is an expert about the market and just has questions about waiting or not….That's all. Bought right before all the bad happened and trying to protect myself in case of more future disasters….I am almost 40.

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  1. […] SOS: I Have a Buyer — Finally — But I'll Only Net $3000! | Second … I think you should be happy you will not be taking your checkbook to closing but will instead, get a check, no matter how small. Think of it this way: you lived in the home and it only cost you $ assuming you sell it at $269K) . […]

  2. […] SOS: I Have a Buyer — Finally — But I'll Only Net $3000! | Second … I think you should be happy you will not be taking your checkbook to closing but will instead, get a check, no matter how small. Think of it this way: you lived in the home and it only cost you $ assuming you sell it at $269K) . […]

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