to sell or not to sell

[Echoooo]

Piggs, I have a dilemma that keep me up all night. We bought in 2007, house value down about 10%. We feel there is a need to move up. However, we will face a loss of about $100k with commission etc. Some people may argue that moving up makes sense, because the market we are aiming has lost more. However, when it comes to decision. We found it is hard to swallow the loss. We moved from another place where housing has not appreciated as much as SD in the past years, so most equity is from hard-earned sweat money. We explored another option, which is to rent out current residence and buy a new one with line of equity. It is workable with positive cash flow (although not much), but we can only afford to change our current residence to 5 year interest-only. This means, we are basically betting the market will pick up within 5 years, so although we are not building up equities, we are at least minimizing loss on this one. This also means we have to lower our new residence search into another price range, but still a move up from this one. Any comments/insights? What would you do? Where do you think the market will be in 5 years? Thanks!

[abell]

I would not bet the market will pick up within 5 years if I were you.

[abell]

I would not bet the market will pick up within 5 years if I were you.

[abell]

I would not bet the market will pick up within 5 years if I were you.

[abell]

I would not bet the market will pick up within 5 years if I were you.

[abell]

I would not bet the market will pick up within 5 years if I were you.

[CA renter]

[quote=abell]I would not bet the market will pick up within 5 years if I were you.[/quote]

^^What abell said. ^^

While the dollar might very well be destroyed, it’s also just as likely that many Americans will be even more strapped for cash in five years.

Unfortunately, there is no easy answer. Sorry to hear about your situation, and wish you the very best, no matter what you decide.

BTW, is it really necessary to move up? Your best bet might just be to stay put and minimize expenses as much as possible. You’ve got your inflation hedge (your current house), now it’s time to work on your deflation hedge.

Good luck!

[CA renter]

[quote=abell]I would not bet the market will pick up within 5 years if I were you.[/quote]

^^What abell said. ^^

While the dollar might very well be destroyed, it’s also just as likely that many Americans will be even more strapped for cash in five years.

Unfortunately, there is no easy answer. Sorry to hear about your situation, and wish you the very best, no matter what you decide.

BTW, is it really necessary to move up? Your best bet might just be to stay put and minimize expenses as much as possible. You’ve got your inflation hedge (your current house), now it’s time to work on your deflation hedge.

Good luck!

[CA renter]

[quote=abell]I would not bet the market will pick up within 5 years if I were you.[/quote]

^^What abell said. ^^

While the dollar might very well be destroyed, it’s also just as likely that many Americans will be even more strapped for cash in five years.

Unfortunately, there is no easy answer. Sorry to hear about your situation, and wish you the very best, no matter what you decide.

BTW, is it really necessary to move up? Your best bet might just be to stay put and minimize expenses as much as possible. You’ve got your inflation hedge (your current house), now it’s time to work on your deflation hedge.

Good luck!

[CA renter]

[quote=abell]I would not bet the market will pick up within 5 years if I were you.[/quote]

^^What abell said. ^^

While the dollar might very well be destroyed, it’s also just as likely that many Americans will be even more strapped for cash in five years.

Unfortunately, there is no easy answer. Sorry to hear about your situation, and wish you the very best, no matter what you decide.

BTW, is it really necessary to move up? Your best bet might just be to stay put and minimize expenses as much as possible. You’ve got your inflation hedge (your current house), now it’s time to work on your deflation hedge.

Good luck!

[CA renter]

[quote=abell]I would not bet the market will pick up within 5 years if I were you.[/quote]

^^What abell said. ^^

While the dollar might very well be destroyed, it’s also just as likely that many Americans will be even more strapped for cash in five years.

Unfortunately, there is no easy answer. Sorry to hear about your situation, and wish you the very best, no matter what you decide.

BTW, is it really necessary to move up? Your best bet might just be to stay put and minimize expenses as much as possible. You’ve got your inflation hedge (your current house), now it’s time to work on your deflation hedge.

Good luck!

[Coronita]

Question: Why do you feel there is a need to move up?
Are you (1) absolutely running out of space and need a bigger place for a family???

Or (2) do you feel that somehow you need to purchase another house to “makeup” for the loss on this one.

If the reason for your motivation to trade up is #2…Save it…This is a situation in which imho you’re just throwing more good money after bad and going from a ok situation to worse.

It absolutely makes no sense imho to move from a fixed rate mortgage to an ARM/leg, when we all now eventually interest rates have nowhere to move but up
Second…The “loss” on your primary home is already done..At this point, if prices go up, the new home and the old home both go up. And if they continue to fall, they both go down. So if you trade up simply because you think you’ll get more money out of it, I don’t think that is the case. In addition to commission of selling your old place, you’re restarting a new loan so factor in the extra payments you are now extending to be in a new home. Also, unless you find a turnkey home, you’re going to be spending money on making it liveable by your standards.

.Personally, I hardly consider primary residence an “investment” from that perspective because in this market, you wont be able to sell it at an appreciable gain to cover the extra costs of your mortgage payments above what you would have paid if you rented anyway….Moving up to a bigger place just makes this difference greater imho.

[Coronita]

Question: Why do you feel there is a need to move up?
Are you (1) absolutely running out of space and need a bigger place for a family???

Or (2) do you feel that somehow you need to purchase another house to “makeup” for the loss on this one.

If the reason for your motivation to trade up is #2…Save it…This is a situation in which imho you’re just throwing more good money after bad and going from a ok situation to worse.

It absolutely makes no sense imho to move from a fixed rate mortgage to an ARM/leg, when we all now eventually interest rates have nowhere to move but up
Second…The “loss” on your primary home is already done..At this point, if prices go up, the new home and the old home both go up. And if they continue to fall, they both go down. So if you trade up simply because you think you’ll get more money out of it, I don’t think that is the case. In addition to commission of selling your old place, you’re restarting a new loan so factor in the extra payments you are now extending to be in a new home. Also, unless you find a turnkey home, you’re going to be spending money on making it liveable by your standards.

.Personally, I hardly consider primary residence an “investment” from that perspective because in this market, you wont be able to sell it at an appreciable gain to cover the extra costs of your mortgage payments above what you would have paid if you rented anyway….Moving up to a bigger place just makes this difference greater imho.

[Coronita]

Question: Why do you feel there is a need to move up?
Are you (1) absolutely running out of space and need a bigger place for a family???

Or (2) do you feel that somehow you need to purchase another house to “makeup” for the loss on this one.

If the reason for your motivation to trade up is #2…Save it…This is a situation in which imho you’re just throwing more good money after bad and going from a ok situation to worse.

It absolutely makes no sense imho to move from a fixed rate mortgage to an ARM/leg, when we all now eventually interest rates have nowhere to move but up
Second…The “loss” on your primary home is already done..At this point, if prices go up, the new home and the old home both go up. And if they continue to fall, they both go down. So if you trade up simply because you think you’ll get more money out of it, I don’t think that is the case. In addition to commission of selling your old place, you’re restarting a new loan so factor in the extra payments you are now extending to be in a new home. Also, unless you find a turnkey home, you’re going to be spending money on making it liveable by your standards.

.Personally, I hardly consider primary residence an “investment” from that perspective because in this market, you wont be able to sell it at an appreciable gain to cover the extra costs of your mortgage payments above what you would have paid if you rented anyway….Moving up to a bigger place just makes this difference greater imho.

[Coronita]

Question: Why do you feel there is a need to move up?
Are you (1) absolutely running out of space and need a bigger place for a family???

Or (2) do you feel that somehow you need to purchase another house to “makeup” for the loss on this one.

If the reason for your motivation to trade up is #2…Save it…This is a situation in which imho you’re just throwing more good money after bad and going from a ok situation to worse.

It absolutely makes no sense imho to move from a fixed rate mortgage to an ARM/leg, when we all now eventually interest rates have nowhere to move but up
Second…The “loss” on your primary home is already done..At this point, if prices go up, the new home and the old home both go up. And if they continue to fall, they both go down. So if you trade up simply because you think you’ll get more money out of it, I don’t think that is the case. In addition to commission of selling your old place, you’re restarting a new loan so factor in the extra payments you are now extending to be in a new home. Also, unless you find a turnkey home, you’re going to be spending money on making it liveable by your standards.

.Personally, I hardly consider primary residence an “investment” from that perspective because in this market, you wont be able to sell it at an appreciable gain to cover the extra costs of your mortgage payments above what you would have paid if you rented anyway….Moving up to a bigger place just makes this difference greater imho.

[Author]

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