House buying and selling
We bought our house when it was a major buyers market. The house sat vacant for 2 years and we got a GREAT deal.
Overall the house is great for what our mortgage payment is. It's cheaper then if we rented a 2 bedroom townhouse. Lots of space, storage, etc. There are a lot of "pros" to the house.
One of our main issues with the house is that there is not a garage. We thought about building a garage ourselves. That was initially our plan until our neighbors sold their house.
Apparently the housing market is booming in our area and it's a sellers market.
Our neighbors lived in their house for 2 years, made minimum updates (their house was a generic re-hab when they bought it) and made a profit of $27,500.
So this gets me thinking... along with the garage I have other issues with the house. The bedrooms are small and the kitchen is small and does not have a dishwasher. The kitchen is outdated but not terrible.
I have been researching the housing market and what has been selling in our neighborhood and what those houses are like compared to ours. If we sold our house we could easily make a profit of $25,000 and possibly up to $50,000.
We could then buy a house that has a garage and a bigger kitchen with a dishwasher and bigger bedrooms.
All of this makes me so nervous though. We would never buy a house that we couldn't afford or that would make us house poor. But we can afford more now then we could when we bought the house we live in now.
Really though- I bought the house and it's in my name. Not going to lie, that has always been something nice to fall back on- my house. I think DH and I are definitely pass where I should feel like that but at the same time we all know how step life is.
Also I know no matter what I could still comfortably pay the mortgage if anything should happen between DH and I. If we had a new house I would make sure I could still afford the house payment on my own but it will never be the good deal we have on our house now.
I worry too about trying to sell our house while finding the new right home for us and the stress that goes along with that. I'm kind of in the mindset "If it's not broke don't fix it" but I'm also in the mindset "You work too damn hard and if you want to upgrade your house that is okay too."
I'm also nervous, what if we wait and the housing market goes down again and we miss a prime opportunity? We have always known that our house was our "starter home", I just didn't think I would be thinking about it this soon.
Thoughts? Words of encouragement, advice, horror stories?
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Comments
If you sold your house and
If you sold your house and made a profit, wouldn't you still be looking at the same type of house because of the price increases?
We can afford more now and we
We can afford more now and we would have a bigger down payment from the profit of the sale.
Our new price range the houses meet most of our requirements and would be an upgrade to the house we have now.
Yes... and I would never go
Yes... and I would never go into a house that I couldn't afford on my own.
Based on the house sales in the neighborhood, I would say the profit would be closer to 50k BUT I estimated 25-50k to be on the conservative side. I'm not even sure I would sell for the profit of 25k because the bigger the profit, the more likely I am to find the house that really meets all of my requirements.
The houses that we can afford
The houses that we can afford now and that we are looking for would meet our new criteria of what we would want.
Part of my mindset is- Why put money into building a garage (it ain't cheap) and then still have "issues" with the house, when we can find a new house with a garage and hopefully fixes to some of the issues.
We almost bought a house
We almost bought a house without a garage. I'm so glad we didn't. DH has so much junk. Just the four bikes take up so much room.
Yeah I don't know how DH
Yeah I don't know how DH deals with it. We have a nice size shed that holds his tools, etc but I know DH would love to have a garage now. At the time we got the house at such a great deal, it made sense to not pass it up.
I might consider getting an
I might consider getting an estimate for what it might cost to make changes to your home like adding a garage or an addition (perhaps attached with a bonus room above it?
See if you could refinance and get the cash to do the additions that way.
Also, you can go house shopping to see if you find something you might be interested in. You can always put an offer with a contingency.
Yeah we would definitely have
Yeah we would definitely have to find the "right" house to move from our house. That's why I almost wonder if it would be too much of a pain in the ass. Like would we find the perfect new house and then be able to sell our house at a good profit? Maybe I am just daydreaming
I would roll any profit right
I would roll any profit right into the new house and be okay with that. DH has put a lot of time and money into the house.
On paper,it is my house. I feel that since the mortgage (and all the risks that go with that) is in my name it does give me a little bit advantage over DH.
Adding a garage will increase
Adding a garage will increase the value of the home. Get an estimate and then see what you think.
Some of the reading I have
Some of the reading I have read is that when you build it on that it doesn't add THAT much value. :?
I think it really depends
I think it really depends upon a lot of factors.
Is your home in a desirable neighborhood? What is typical for other homes in the area? A realtor can help you with figuring out what your valuations might be before and after certain improvements.
Well that is the thing... we
Well that is the thing... we don't live in a very desirable neighborhood. So I'm a little surprised that the houses have been selling for what they have been selling for. We live in the older part of town and we border right on the bigger city. It's by no means a terrible neighborhood, a lot of people that live there are older people that have lived there for a long time.
So our thought process too has always been- we put money into a garage, we put money into the kitchen, etc. then want to sell, would we get our money back- probably not.
BUT if other houses around
BUT if other houses around you have them, and you don't, you will take a hit on comps.
I would find a realtor that I like and trust and have that person do a CMA - he/she will be able to tell you whether or not it's worth it. I know where I live, having a garage is a must and it doens't matter if it is/was original to the house or added on later.
It's 50/50.
It's 50/50.
Oh yeah I would definitely
Oh yeah I would definitely have to find the perfect house to sell the one we are in now.
I'm thinking I need to have a realtor come in and look at the house and give an estimate of how much it can sell for and what we need to fix, repair, etc to get the most out of our house and start working towards that. That way if we do find a house, then our current house would be ready to be put on the market.
That sounds like a good place
That sounds like a good place to start.
Yep, talk to a realtor and a
Yep, talk to a realtor and a mortgage broker and possibly even a contractor about the garage so you have all the information and then make a decision.
Moving sucks but if it is to move to a house that you will live in for 5-10 years + then it will be worth it in the long term.
If you have this much anxiety
If you have this much anxiety about selling and moving then it is probably not the right time.
Over the years we have purchased 3 homes (since we married) and the purchase or sale was never an anxiety inducing thing. Moving sucks but the buying or selling was not an issue.
When it is right.... there shouldn't be much anxiety involved. At least that how it works for me.
In all fairness everything
In all fairness everything causes me anxiety. Ha Ha!
So if you bought your house
So if you bought your house today it would cost you at least $25000 more with a higher interest rate, and higher mortgage payments !!
So if you sell your house, you can only buy something equal to what you have, and still pay more because of higher interest
Unless you just get lucky and find something you really like, with bigger bedrooms and small other rooms.
Hoping we get lucky
Hoping we get lucky
I understand all of this. I
I understand all of this. I want to get an "ours" home but I love my mortgage and the fact that it's my house. Let us know what you decide.
I love our mortgage... LOL...
I love our mortgage... LOL... That's why part of me is like just stay where you are...
does your paper profit
does your paper profit include selling costs? things like realtor fees, transfer taxes, repairs etc? Selling a home is expensive.
Yeah I've never sold a home
Yeah I've never sold a home so it's something I would need to research more.
I would simply scout the
I would simply scout the market for something I really like first...
This will include, how far from skids and BM,location, school distance, hospital distance, shops.... then affordability... Then do the calculations if you can afford it or not,
contact the seller after this and make it clear, you definitely want the house, but you will have to sell yours first, if the seller is prepared to give you an first option for 3 months, go for it, make sure your house sells in 3 months or before.... work on lowest profit in case you have to drop the price a bit during negotiations.
I believe if it's meant to be it will be, if the dream house owner is an idiot and say , no option for 3 months then it's simply not meant to be.
Yep I figured... if it's
Yep I figured... if it's meant to happen it will happen.
Zero - you know if you get a
}:) }:) Zero - you know if you get a bigger place and a bigger kitchen the brats will be there in a flash right..
I would start saving like crazy and keep the small house, no place for other people to move in, no space in the kitchen to cook for more then 3 people.... then I will buy a new bigger place when all brats are married off and on their own...
but not to big, cause they will move in with their extended family
We are scaling down from 4 bedroom houses to one bedroom lol....
Well we are already in a 4
Well we are already in a 4 bedroom. They know they aren't welcomed! Ha Ha.
I do like the idea of a house that the skids have never stepped foot in }:) And where I don't have to keep reliving Potato Gate.
current house - break wall
current house - break wall down, extend kitchen with one bedroom.....
build double garage.... play around with ideas on how to improve your current home.... you already have your garden,
4 bedroom? yowzers! that
4 bedroom? yowzers! that would be a DREAM.
The house really does have
The house really does have perks- 4 bedrooms (though 3 are small), 2 full baths, a "5th" bedroom which is really a large storage room, large laundry room...
what's the floorplan like?
what's the floorplan like? you may be able to remodel some, and add on a garage - when you check with your realtor, ask him/her how much those improvements would add to the value of your house, and if it fits in with the neighborhood (versus overimprovement). that would give you a better comparison on whether to improve your current house or buy a different one.
yessss !!!1 This ZERO... and
yessss !!!1 This ZERO...
and that 5th storage small room simple screams wine room to me... }:)
There can be things you might
There can be things you might do to rearrange. I have known people who have knocked out walls to make the rooms larger. Like having only 3 bedrooms instead of 4.
Some people are afraid to reduce the bedroom sizes, but if it is something that the homeowner does that makes the home more livable for THEM then it can be a worthwhile investment.
Part of the decision process involves thinking about how much longer a family might live in the home. It wouldn't make much sense if you plan on moving within 5 years, but would make a LOT of sense if you love the area and plan on retiring there.
if 3 bedrooms is next to each
if 3 bedrooms is next to each other, you can simply split the middle bedroom into 2 sections and those are extensions on the other bedrooms... bigger bedrooms
Yes 3 on the top floor are
Yes 3 on the top floor are small and right by each other. And of course the bigger of the 2 are right by each other... As BS gets older I would like more privacy
The biggest bedroom is downstairs, but I don't like the room. It just feels darker and colder down there. Closer to the earth where all the bugs are. Ha Ha
spit the middle big room in
spit the middle big room in 2, 50% will be BS's room, move his closet in there....
your closet moves to the other section and your bed far away corner from BS....
To make the kitchen workable
To make the kitchen workable (add dishwasher and more counter space) we would have to do a full kitchen reno... seems like so much work and money.
no never ever get a big
no never ever get a big kitchen.... If you have an awesome big modern kitchen DH has this silly ideas of having all the skids parties there and entertain them all the time...
don't go there lol... keep it small and cramped
I would also make the down
I would also make the down stairs bedroom (she does not like in anyway) part of the kitchen if possible...
and build a garage.....
Thanks everyone for your
Thanks everyone for your feedback.
At this point it's just something I am thinking about and considering all the possible options. Thankfully we are in place that we do like, so it's not like we are desperate to get out. But we know down the road this isn't our forever home, so we need to at least consider the booming market right now.
I will probably reach out to our realtor (who sold us the house we have now) and just talk to her about what she thinks we can get for our house and the whole process.
Don't. 25k profit gets eaten
Don't. 25k profit gets eaten up immediately just from selling it. Realtor fees are 4-5% of the selling price and only the seller pays. Legal fees (usually flat rate) can be up to $1,500. If you have a mortgage, closing that mortgage (not a prepayment penalty) and recording fees and transfer taxes are another 3-5k. Cost to move and then fix up whatever needs to be fixed at the new place will put you in the negative.
I've bought/sold quite a few properties at this point and unless your gross profit is over 50k, it's not worth it (and you may only end up with 10-15k in your pocket.)
Good to know!
Good to know!
I'll tell you this much, what
I'll tell you this much, what I've paid in interest on homes I've mortgaged and sold is way more than any "profit" I've made on the sale of the home. I've crunched the numbers and have thrown away some hard earned cash to the banksters. The banks are making the real profit.
I refinanced my current home at 3.25% with a 15 year mortgage. I also pay a little extra to the principal each month. This helps minimize the amount of interest/profit the bank will make off me.
My next move will be selling my current home in about 10 years and buying a condo or town-home outright. Otherwise, the banks just take my hard earned money.
If I were you, I would do some updates to your current home. Do you really want to start the amortization over again with a new mortgage?