Quote:
Originally Posted by Nina-in-Ashland
Thank you, John, I appreciate your advice.
Now, where's that crystal ball Ani mentioned?  If only it was that simple. |
Nina - I do have a crystal ball, LOL!! Unfortunately, it isn't very reliable for real estate.
Your post stayed on my mind yesterday evening. To me, what you are dealing with is representative of what thousands of people are dealing with "out there" right now. So I continue to contemplate your options.
John and Jack have made some good points here. Lots to think about.
What has me more concerned is the looming (potentially devastating) legislation that the House has passed. If the Senate rubberstamps this bill, we citizens will no longer have the luxury of deciding when we will sell our homes and how much we can market them for. Fannie underwrites over 50% of all loans in this country and if Fannie changes its rules and will no longer underwrite mortgages for homes that are not "green" and comply with whatever arbitrary standards that the Feds set . . . selling one's home is gonna become a very complicated process. And the standards will be issued and become law w/in 180 days of effective date, wh/ I believe it 1/1/2010.
Let's say this heinous piece of legislation passes. That means you have a window of up to 6-9 months to sell your house w/o concern for retrofitting any aspect of your home wh/ may be out of compliance for certifying it as "green." This could be anything from installing energy star appliances, insulation, windows, light fixtures (yes, even light fixtures would have to meet established standards).
I hear people saying - "There is no way the Senate will pass this bill." Well, Obama is pushing this legislation hard and continues to make public statements about its passage and his belief that it will pass - and will quickly pass. I would never have believed the bail out (w/ all its pork) and the stimulus package (w/ all its pork and federal $$ to states) would have passed. Our country is in the worst financial situation in its history - and to think our legislators passed a bill full of BORROWED federal dollars wh/ will be distributed is past irresponsible. Yet, Congress did it!
So how do you roll the dice? Make an assumption that all these restrictions will be in effect in only a matter of months - and slash and burn w/ the price of your home, in hopes you sell it b/f Fannie cuts out loans - and you have to spend some $$$ to retrofit your home?
Do you assume the value of your home is gonna go up when home prices continue to slide? (Some homes in Charlotte are holding value better than others - but is your home located in one of those rare neighborhoods?)
But here is the big question: If you don't sell your house now, and you end up not selling it in 2010 (for whatever reasons) . . . how will this affect your finances and plans for the future?
You see, I believe this legislation is intended to create a class of rental properties. That is a whole different discussion . . . but even if the legislation is not specifically intended to do that, it will definitely have the "unintended consequence" of creating large pools of rental properties - b/c people who need to move with jobs will not have the $$ to retrofit their homes - so to ease the financial burden, they will have no choice but rent in hopes of paying that mortgage - while renting somewhere else.
If that happens, your property will become one of many on the rental market.
So . . . would it be better to get a good renter NOW b/f the market gets flooded in 2010 w/ rental properties . . . or would it be better to sell the house (at a lowered price) just to get out of the mortgage?
My crystal ball is of no help on this one. My gut feeling is that if enough of us start screaming to our Senators next week that this bill is gonna break the back of the property-owner class (wh/ is exactly what it will do) . . . perhaps it won't get passed . . . but my fear is, it will be passed (in some form). I think too many of us fear being labeled "over-reactionary" and so will not speak up - until it is too late (and the bill has become law).
The worst thing you can do at this point is throw up your hands out of desperation and confusion about the future.
When I have a tough decision to make . . . I consider the worst possible scenario. Then I decide - if it comes to that - can I deal with the situation? If the worst possible scenario is writing out a check at closing, then you need to do whatever you feel must be done to avoid that. If the worst possible scenario is moving to another area, getting stuck with a house here that will cost you $20,000 to retrofit b/f you can even put it on the market, then do everything possible to keep that from occurring.
IMHO - this is no time to think about "best possible scenario." Best scenario, we all agree, is that you put off selling the house til the future when the value goes up. However, my honest belief is that nearly 100% of the homes in this region are at their highest valuation (as far as selling price point) RIGHT NOW - especially if this legislation gets passed. In addition, loan interest rates will necessarily be going up next year and municipal tax rate hikes are gonna occur at least by 2011-12. The cost of home ownership is getting ready to soar steadily, starting no later than last quarter of 2010.
Part of this legislation slaps an annual fine on homeowners who own properties w/ a "footprint" larger than some arbitrary figure - I think it is 2500 sq. ft. That will be an additional "tax" to be tagged onto the cost of owning your home, if it is above that square footage threshold.
Weigh all this out . . . you may think you can't afford to bite the bullet now, but that bullet may be much more damaging even six months from today.
To my fellow CD members . . . I apologize for the "doom and gloom." But I think we all need to face what may be down the road. Just b/c it seems absurd - that doesn't mean it won't happen.
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one further thought crossed my mine
