We bought our house a year ago - about exactly a year ago. If we were to sell now, how much would we lose? The housing market isn’t great here, either, but our house has sold the last few times in a very short amount of time. Our house has a few things going for it that other houses don’t - 2 1/2 bathrooms, an office, etc.
Basically, my husband’s unemployed and has had a hell of a time finding a job. He was turned down for unemployment (we’re disputing it as the reasons they gave make absolutely no sense), and we can’t survive on my salary alone (we have some savings, but we’ll go through those pretty quickly if this is the case).
At this point, I’m thinking one of our big options is for him to apply for jobs in my hometown, and we may have to move. This sucks for the main reason that I adore my job and do NOT want to leave it, but I may not have any choice. We may be able to move in with my parents for a couple of months until we get on our feet out there. Yeah, I’m panicking, but I’m also trying to think rationally. I know people in Virginia, I love it there, and if I could pick up my office and move it there, I would.
So if we sold our house now, how much could we expect to lose? It sucks because we did sink a down payment into it, so I’m guessing we’d completely lose that.
Maybe I’m not understanding your situation. Does your mortgage have some huge penalty clause? Did you take an interest-only repayment option?
You won’t necessarily lose anything. If you can sell your house for more than you owe, you’re golden–you’re only going to take a loss if you have to sell the house for less than you owe.
If you owe $100K, and the house goes for $115k, your mortgate holder gets their $100k and you get $15k, less any closing costs that you are responbile for. No real loss there, you’re just not gaining as much as if you could have held on to the house longer.
I’ve never sold a house before, so I don’t know how it works. I don’t think we have any penalties or anything in our mortgage. No interest-only, nothing like that. Standard, fixed-rate, 30 year mortgage.
I think I’m just worried that we’re going to take a huge hit if we try to sell now.
I don’t WANT to sell, but I’m starting to worry that it’s our only option.
It’s sort of like balancing a checkbook. You just have to take what your house will sell for plus/minus the other factors.
How much did you buy the house for?
How much of a down payment did you have?
What is the principal balance of the loan?
Did you take out any 2nd mortgages or home equity loans?
How much will you get for the house when you sell it?
As long as the house is worth more than you owe, you guys will be okay. You may not get the kind of return that people generally strive for in buying a house, but that’s okay.
The main problems will be if you have to lower your selling price significantly or if you have to move prior to selling and end up paying the mortage on the house while renting somewhere else–then you will be losing money.
Good luck on appealing the unemployment decision–sometimes there are just a few extra hoops to jump through (the appeal process in this case) to get what you have coming to you. Unless he didn’t work enough quarters to qualify he should be entited to his money. If he was laid off, I can’t imagine the reasonign behind denying him. If he was fired for cause, he should still entitled to unemployment but have to go through a longer waiting period. If he left on his own hook, same thing–a longer waiting period before he is eligible for his money.
If you don’t mind me asking, what reason was given for the denial?
They said that he either didn’t work enough in the 20 weeks prior or that he didn’t make enough (which he did both, he met the requirements fine). I have a feeling it was either an administrative error, or there’s been a mixup because of his severance. His job ended January 11th, but he received severance checks up until a couple of weeks ago. So we’re wondering if that’s the problem - they don’t consider him to have been employed these last three months. He’s already filed an appeal, and hopefully, that will take care of it.
Dangerosa, my evil FIL is a realtor, so if anything, we could probably get him to do the listing for free. Of course, he’s an ass, so that might not happen.
I’m trying not to get too upset - hopefully, the appeal will take care of the issues with unemployment. Honestly, I want nothing more than to move back to my hometown, and I think it’s a last resort, but it’s one we need to start considering.
If we do move, we move in with my parents for awhile (my mom’s already offered, and while I hate to do it, I think it would be a good situation for us) and even if we have to pay the mortgage for a month or two until the house sells, we’d still be okay. It’d all be contingent upon my husband getting a job in Virginia, but it seems like the job market there is much better than the one here - I think we’re just living in a seriously depressed area right now - but even so, houses still seem to be selling okay. The major issues are insurance (with me being pregnant, that’s a huge one) and the house. I can go work for my brother until after the baby comes - he owns a restaurant, and I’d be able to help him out, too.
Even if we could sell the house here and move back into an apartment until after the baby comes so then we could move to Virginia, I’d be okay with that. I think we just need to figure out what we’re going to do.
If your FIL works for a realty company, rather than himself, he’ll probably only be able to “donate” his part of the commission. Usually the commission is split between the realtor selling the house and the buyer’s realtor. And of the seller’s realtor’s commisson, if he works for a company, say Century 21, that company gets part of his cut. Also, if you paid points and closing costs on your mortgage, you’ll lose those. However, that’s money already spent, so you might not feel it as badly.
The best idea may be to get your FIL to give you an honest appraisal of your home’s expected sale price. You won’t know anything until you know that.
Good Luck! I’ve been unemployed for 5 months, and I’m single. Fortunately, I was thrifty and had a good bit of savings, but that’s dwincling.
We didn’t pay points, and we paid half the closing costs. If we eat that, we eat it - that’s not a problem.
And FIL gave us back his commission when we bought the house - he works for a small, privately-owned company (it’s the company of a family friend), so we think we’d be okay there.
Thing is, we have savings, but we’re trying not to touch them. Unfortunately, I don’t think we’re going to have a choice. We’ve just had too many issues come up (we owed on our taxes, our gas bills have been outrageous this year, etc.).
I think if anything, it’s made me realize how much I want out of this state. I hate it here with a passion. We just need to figure out if moving back is feasible. ElzaHub may have to go stay with my parents for a couple of weeks and job-hunt. If we can get him settled in a job out there, we should be able to do it. I just think in the end, moving back there would be a good solution for us all the way around.
This site has a pretty good right up about any taxes you might pay. It’s a nicely written article.
If I’m reading correctly, currently you can take up to $250k in profit (double that for a married couple) without owing capital gains if 1) it’s your primary residence 2) you haven’t taken this exemption in the part 2 years.
Tastes, don’t you have to live in the house for at least two years? Isn’t there some sort of tax hit if you sell your house and you haven’t lived there for 24 months?
ElzaB, I’m so sorry you’re going through this right now. You should be happily gestating and not stressing. Is it an option for you to move into an apartment for a bit and rent out your house, enough to cover the mortgage? Of course, this will only work if the apartment rent is less than your mortgage payment. Then, when Hubby gets a job, you can move back into your house. The advantage to this, is if you can rent it for say, $10 less than your mortgage payment, it qualifies as a “failing business” to the IRS and you get a nice little deduction on next year’s federal taxes.
I heard on Clark Howard today that you can negotiate the commission a real estate agent gets. Apparently, 7% is a bit high, and some will go as low as 4%.
Sorry, I missed this part. As long as your house sells for more than you bought it, you don’t “lose” your down payment.
Example A: Couple buys a house through the VA loan program, no money down, for $100,000. The sell it for $150,000. Couple grosses profit of $50,000 (minus commissions and fees, of course.)
Example B: Couple buys a house with a conventional loan, putting $20,000 down on the same $100,000 house. They only owe $80,000 now. They sell it for $150,000. Couple grosses profit of $70,000.
The fact you put money down will actually help you, I think. Please note, I have MAJORLY simplified things, but you get the idea.
I just read about and looked at a site called zillow.com; One enters one’s address and gets an estimated sales price. That much of the site is free. I didn’t pursue it enough to learn if any fees apply for more info.
I just went to zillow.com. I don’t know how recent it is, but there is a birds’ eye view of our neighborhood, and there is a house built where they show an empty lot.
According to them, our house has doubled in value in the five or so years that we have lived here.
I just looked at that, and it’s way underestimating our house - plus, it’s saying we only have 1 bathroom, when in reality, we have 2 1/2. I’m not sure how up-to-date their info is.
Ivylass, if we could do that, I think we would. At this point, I think the best thing for us to do would be to move back to Virginia. We’d have my family there, who’s a lot more of a help to us than his family (it’s his parents here), and my mom’s already offered us childcare.
However, he did get a call for a second interview today for the company he really wants to go work for - so that’s on Tuesday. Hoping to God this comes through. So we’re going to put off discussing moving until after we know about this.
And thanks:). I’m so tired of being on an emotional roller coaster. We have our savings, but those were supposed to be for my maternity leave in August so I can take more than the paid six weeks. Using that money just means less time I get to be home with my baby:(.
One option not mentioned - and here your Realtor FIL may help - is rental.
Things that may be worth considering:
*A. How much are comparable rents in the area - how close (or will it) cover the Mortgage
B. What is the Real Estate prognosis for your type of House and your current area*
To me reading superficailly about your situation, this would be an option to consider **if ** you are going to lose a pretty fair unaffordable amount if you sell out now, if you will live pretty much mortgage free at your Mom’s and so can pay a couple hundred a month to pay the gap between the rent and mortgage, and if your FIL (or other family) could deal with minor problems that may arise day to day and most importantly if you have an capitalistic spirit and can live with the risk B above implies (i.e. if you hold this a year or two or three likely you will make a few 10’s of thousands - but no there are gaurentees).
You must know what the Virginia (esp. NoVa) housing is like and know what the likely prosepcts of getting a house there - esp. with a financial loss at this point.
We sold our house early. I was laid off shortly after purchase (and pregnant) and my husband was laid off four months after baby was born.
We were hit with a massive penalty (Interest Differential) that ate up most of the profit, adn we sold our house for almost 15,000 profit (after all other penalties and repayments). basically our bank screwed us, even though we pleaded with them over and over and showed them that financially we were nearly ruined. The printout expired the day before the paperwork was final. Our penalty went from a hig-but doable amount to almost everything we were making off the sale. We had nothing left to cover off any other bills, including a big line of credit with the same bank.
In the end, it wasn’t entirely worth it, although trying to do it on one salary we would’ve been totally house poor, barely able to buy food and diapers for our then-newborn.
My advice, be very, very cautious but if you need to sell, you need to sell. After it was sold it was a huge sigh of relief.