bg – I’ve tried to make the point several times. Your “own” money was exchanged for a house. A house can fluctuate in value. Until you understand that this discussion is kind of pointless.
But to address some points in your very wordy post…
[quote=bearishgurl]UCGal and SDRealtor,
How long do you think one should own a property with a 68-70% LTV mortgage (amortized EVERY YEAR of ownership [over 30 years] before they can recover their OWN $$ out of it upon sale?).
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Has anyone ever known an owner to LOSE their OWN INVESTMENT in a property bought 12-15 years ago at 78% LTV in SD County when they never refied or took cash out and also improved the property with their own funds?? If so, WHERE was the property and do you think they overpaid for it?
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It’s all a matter of the market conditions at the time of sale. There are no guarantees that when you want to sell, you’ll be able to extract your investment.
An actual example that fits your criteria. A friend had a horse property near escondido. (literally right outside the city bounds). They improved the barn and corrals. They put on a new roof on the house. They never took money out. When they got divorced and needed to sell, the market wasn’t good (mid 90’s). But they were divorcing and the property needed to be disposed of. They had to bring cash to closing. They lost their down payment and their investment (corals, barn, new roof).
[quote=bearishgurl]
If you are currently a prospective buyer, do you expect to find an “equity” resale out there (NOT a SS/REO) today where a longtime seller will accept ’99-’02 prices even though they have improved it in the last decade with, say $25-$50K of their OWN MONEY?? We’re talking in SD County, within 5 miles of the coast or bay. Truly, I want to hear your experiences…
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Buyers expect to pay market value. Why would a buyer pay over market?
Sellers either are willing to price to market and sell, or are pricing to high and have it not sell.
There’s a home for sale on my street. It’s been on the market since spring. It’s not selling because the equity sellers are pricing too high. They have made nice improvements (new roof, windows, landscaping, cosmetic stuff inside.) They want to pull out their investment and won’t sell for less than that. It’s been on the market a while and is not moving.
[quote=bearishgurl]
UCGal, you are fortunate in a couple of ways. You did not have a lot of building going on within a 10-mile radius of you in the last decade which was in direct competition with properties like yours and ALL financed with loose lending practices. There isn’t much distress in your zip code. In addition, your tax assessment is protected by Prop 13 for the life of you and/or your children/heirs in the property (if you decide to never sell it). This no doubt eases the pain greatly of your feeling you may have overpaid for your property. Since you paid your parents directly for your property, perhaps you will get some of it back when they pass…it isn’t like it was an arms-length transaction. How would YOU feel if YOU, as a single parent, lost $120K to $140K of your OWN money on a perfectly decent large home in a perfectly decent neighborhood after paying on it religiously for 14 years and never removing equity thru no fault of your own because you “had” to sell it in a fvcked-up market to finally “retire.” It’s not like “insurance” is gonna cover the loss, lol.
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There’s distress in my zip. But it’s mostly in condos. The bubble drove prices up (and down) everywhere. There was a short sale across the street from me. Previous owners had heloc’d the heck out of the house. There are no exempt areas.
Not that it’s any of your business… I paid MARKET value for my house. If you had known my dad you’d know that this is the way he worked. The advantage I got was the prop 13. I will not deny that.
Since then I’ve been aggressively putting money towards retiring our mortgage. My debt reduction is not “my money”. It’s not cash. It’s not spendable. I made a choice to exchange money (liquid) towards retiring my mortgage on an illiquid asset. But I will have a fully paid for asset that provides shelter for my family. It may turn out to be a bad decision if hyper inflation happens. I will accept that.
I understand you’re frustrated. But you need to understand that “your money” was gone when you entered escrow. You have title to a house that is only worth what it is worth. Fair or not, that is fact. External factors DO impact the price. That is life.
