Rent my House and Go $1300 negative???

[Anonymous]

i see 14 comments from people thinking with the “realtor mentality”. the realtor mentality is that there is only one way to buy or sell a house, that being a traditional down payment, a loan from a lender, and having good credit. if i were in your situation, having extracted a large portion of the equity, i would offer a lease option, an equity share, or a subject to sale. if you would like to retain some tax advantages and participate in any future appreciation, an equity sharing agreement would be to your advantage. the problem is that the average home owner lacks the knowledge to operate outside the box of the realtor mentality.

would it be financial suicide to try and hang onto this house given how negative I am?
……. by negative, i assume your are referring to your outlook on your situation. i see your situation as a positive one.

I see other people doing it all the time and I wonder if they are crazy too.
………probably not crazy, maybe just more educated.

my advice to you is not to panic. do yourself a favor and get some education. it will pay large dividends in your future endeavors in real estate…….

best of luck and i hope your situation is resolved to your satisfaction
hozdaddy

[powayseller]

I like your thinking! I had never heard of these ways of structuring real estate. If the poster assumes prices will go down by 50%, would you still advice the lease option, equity share, or subject to sale deals?

[23109VC]

what do you mean a lease option? you mean offer the potential renter a “lease option to buy” meaning they pay a slightly higher monthly lease payment, and they get an option to buy at a set price when the lease is up? I coudl do that – but don’t those usually require me to agree on the future sales price? if prices drop, and I put down a price based on current market prices, then they pass up the option. if somehow the market picks up and my option to buy is too low – they buy it and I lose the equity.

they might opt NOT to buy, and then I’m right back where I started.

elaborate how these alternative forms of “selling” woudl work?

I also debated about renting with an optiont o buy in a house whenI move. I’ve seen some homes that were “for sale” now offer “lease w/option to buy”. the sellers are desperate, are losing money, and want to get their home occupied, get some cash and maybe sell it down the road.

also, prices are still going down where i live. a competing house just dropped it’s price another $20k. At this rate, I’ll be unable to sell my house if prices drop too much. I am almost to the pint where I am going to LOSE money if I sell it. I’m starting to worry I may be stuck in my house. I mean, I LIKE my house, but I have already transferred my job…I am in a nwe office that is 75 miles from my house…I trasnsferred alrady..and now my house won’t sell. I can always transfer back…but I may not get another opportunity to trasnfer again..it was a favor they did me to move me from one office to the other..and the move put me much close to San Diego/better weather/family/etc….i can go back to the Palm Springs area..which is nice, but summers are hell….

what do I do? one person suggested to me that I refi my house, but i looked into doing an interst only loan to get my payments lower…but since rates are now higher,a nd my current loan is at a great rate, even an IO loan saves me VERY little per month…not enough to make the loan payment more affordable.

any suggestions?

i now understand how people got stuck in their houses in the last decline. you have a payment you can afford, prices go down, you go negative, you can’t leave/sell…

[powayseller]

Go back to the 2nd comment, from davelj, who recommended pricing just under your competition and selling before the market declines further and your loss increases further.

[Anonymous]

in your original post, you stated you NEED to sell your house. that tells me that even tho you LIKED your house, you are willing to part with it because in your instance it satisfied the need of shelter rather than an investment and you are ready to move on due to a job transfer. by purchasing a couple of years ago, you were fortunate enough to have been able to extract a reasonable amount of equity by refinancing. real estate is cyclical in nature and since you are approaching it from a shelter standpoint rather than an investment standpoint, i see no need for you to undertake the risk involved with holding the property for an extended period of time. if you would be satisfied with $399k, then list it for that. the bottom line is, are you really worried about selling your house or are you trying to squeeze that last $20-30k out of it. you bought a house, you lived in it, you got tax breaks, and it appreciated. now is not a time to be greedy or to start to panic. the house has served it’s purpose . try listing it at $440k and say seller will carry with liberal terms…..take back a $40k second at 5 or 6%, interest only, due in 5 years. then they only have to get a first for $360k, assuming they have $40k to put down.the beauty is they probably wouldn’t have to pay PMI as the first would be close to 80% LTV, enabling them to save a decent amount on the monthly payment. let the money dribble in or discount the note for cash in the secondary market. if you keep the second and the people flake, you have the option of stepping in and curing the default to protect your position. if you don’t want to get involved, worst case scenario is you would have taken $400k for the house anyway, so all the interest payments until they flaked are a bonus. best case scenario is, you get the interest payments for 5 years and the principal is returned in 5 years. that would be my advice. since you are not in it for an investment, you really don’t want to take the risk or spend the time involved with lease options or equity shares. with the above scenario, you are offering a better deal than your competition without sacrificing price, your need to sell your house is solved, you’re downside is minimized, and you have the potential to pick off some more money with the carry back. best of luck, hope i’ve given you some insight to some options
hozdaddy

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