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When we bought our first home, we were told to basically "pack sand" and come back in a year b/c husband was just out of college (i was still in) and so his work history was not there and we had no down payment. Fast forward a year and he has a work history, we have a downpayment and we bought a small condo.
Two years later we had to move due to relocation. We sold the condo and moved to a home in upstate NY. We had an ever bigger downpayment due to selling our condo for a small profit.
Two more years later we moved back to Philly again due to relo. Sold our home and about broke even due to closing costs. Took our equity and built a "luxury" townhome. We rented for 7 months while it was being built.
A year later (present) we had to sell due to a permanent relo. (No more moving!) And, now we can't sell b/c al;l of these buyers want a bargain b/c of the idiots who could not afford their homes to begin with.
I AM NOT PAYING FOR THEIR MISTAKES! Just won't. We did it the right way and I believe we will be rewarded for it in the long run.
I'm not aware of the specifics of your situation, but can I assume you knew that you would either be mandatory relocated or were planning on moving by actively applying for other positions? If that's the case, why didn't you rent instead of buy?
You've done a lot of moving, buying and selling in a short time period and were lucky enough that the timing was in your favor, except this last time. From my perspective, you took a gamble and bought when you probably should have rented in the hopes of making some money.
I can understand and appreciate your frustration with how irresponsible buyers and lenders have created this mess, but I also think you're mistaken when you think that every time you go to sell, you should make a profit or even break even. In fact, that's an extremely unrealistic notion to have when you are selling within a year or two of buying.
In my line of work, relocations and such are common place. I've never understood the guys who wanted to relocate but always bought a house so they could make money when they sold. It seemed like a lot of hassle and risk when they were only going to stick around for a few years. I rented, and finally was able to relocate permanently to my dream spot with a good chunk saved for a down payment and no strings attached, ie. no house I have to sell first. That opportunity has been denied to a lot of my coworkers because they live in tanked housing markets and can't move.
I just don't agree with this whole mindset and expectation that homes are to be used as short-term vehicles to make money so that the next model is bigger and better.
Where I came to the "irrational" part is when I hear "the market is crashing with no bottom in sight so I will go offer 20-30% off the asking price" just because some talking head ratings driven person says so and not taking into account location,condition,age,appreciation etc of the property, instead just looking at all properties/markets as a whole.
This is what is currently happening, watch the news and you see doom and gloom BUT you rarely see or hear any of these stories put limits or disclaimers on WHERE it's happening leading buyers to believe that there's a fire sale everywhere in the country.
Are some properties over priced? Certainly just as with anything being sold and they will be weeded out but that doesn't mean the whole market is overpriced as we are being led to believe.
Jim, the media has made MANY mistakes covering RE throughout time. You can also say they were "late to the party" in reporting where this was all heading. You really didn't start hearing how bad things were getting until this past summer. (Most people who followed real estate knew that things were getting bad way before that).
You can also state the reverse as per the NAR saying things were fine when markets were doing terrible for a long time. It works both ways. Point is, alot of times the media doesn't do the homework they should in stories like this.
I know this is a tough time for sellers, me being one of them. What I find ironic is how a few years ago, sellers were in the drivers seat, asking for obscene amounts for their homes, and getting it.
Now, the worm has turned and sellers are the ones "taking it in the shorts".
The unfortunate folks who bought at the high, and are now trying to sell, are in a bad position. Those who have significant equity can lower the price of their home and it will sell. Then, with any luck, will get a bargain on the other end.
It is difficult, but this is a NECESSARY correction to an out of control housing market. There are going to be many left in its wake, but ultimately, will benefit many more.
I can understand and appreciate your frustration with how irresponsible buyers and lenders have created this mess, but I also think you're mistaken when you think that every time you go to sell, you should make a profit or even break even. In fact, that's an extremely unrealistic notion to have when you are selling within a year or two of buying.
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That's unfortunately the problem w/the mindset of many people. They feel they are entitled to get a certain price point regardless of market conditions.
Those same "market conditions" are bad for sellers now and good for buyers. Its just a reversal of 2-3 years ago that's all (w/less buyers now).
There is no set rule on how much you should get back.
I don't think anyone should go into buying a home purposely to sell it again for a profit in a short period of time. We are selling a home for $4k less than what my husband paid, taking out about 40% of his equity instead of all of it, and putting it into another townhouse that we realize may sell for what we paid (approximately) just like the one we're selling now did. However, we're not buying a home to make a profit in 7-8 years which is how long we figure we will stay in this one to save up enough for a single family in the same community. We're buying in our ideal neighborhood, a house that we can afford, and a house that will work for our needs without going overboard on anything. Hopefully as we update (which the previous owner didn't really do at all) we will make it so that we get a small profit or see the money we put into the house return to us. That won't be our motivation though, we're just going to repaint and change flooring to match our tastes (no more wallpaper!), replace appliances as needed, and any other thing that needs to be fixed or replaced in the house will be updated. The only major upgrade we have in mind other than changing out some outdated items that need replacing is to add a jacuzzi tub, but if we don't get the money back from changing that out at least we will have enjoyed it. If everyone had bought homes that were what they needed and could afford realistically then we wouldn't have this problem. I won't say I'm sorry the housing prices are going to go back to where they should be, hopefully when it's time for us to try for a single family home we can find one we can afford.
WE DID NOT KNOW WE WERE RELOCATING. The first move was for a promotion that had been a long shot-and he got it.
The second move was for relocation b/c his office shut down and he was offered a job BACK in Philly.
THe third move is b/c we found out about changes happening in the company and husband feared he would lose his job in Philly so we moved to stay with the company and keep our stock. HE WAS RIGHT. He would have lost his job if we stayed in the Philly market.
WE NEVER bought planning to make profits. It just happened in the first home, broke even in the second.
This home we planned on staying in for at least 7 years, but that didn't happen due to things out of our control.
Twimma I think the fact that you are doing all right paying the mortgage and your rent where you have moved to says that you didn't buy out of your means. It may be that you bought during the end of the peak, but if the other agents are surprised that your house is priced so well then I think you are right to wait it out. It's a bummer to pay a mortgage that you don't have to, but you obviously understand what you are doing and how it will affect you in the long run so I say go for it!
You'd just hate to trap yourself with two mortgage payments for an extended length of time, watching the housing market continue to drop. Have a strategy in mind - Will you follow the market down, or will you let other sellers drop their prices while yours remains firm? Will you look for a tenant for your home? And don't forget the whole capital gains tax comes into play if you've not lived in your house 2 consecutive years of the past 5.
Here's a rather sobering real life example. A couple in So Cal building a new home in Big Bear. Their current res was in a somewhat deteriorating neighborhood. They set their price high (in late 2005). Got a market value offer and refused to accept it. They weren't going to "just give their house away". . . . Fast forward to today. The prices in their neighborhood have declined significantly. Their home is STILL on the market at a way too high price, because "they're not going to just give theirr house away". What foolishness - they could have had that place sold 2 years ago and pocketed an extra $200k+. . . . but they didn't want to "give their house away".
Just look at the big picture. Consider your options and what you will do if prices continue to drop over the next 2 years. Make the decision to either stay put til the market turns around, or else be willing to take the "hit" now and be done with it. Just don't put a home on the market unless you really plan to sell at what buyers are willing to pay.
Remember it was the sellers calling the shots 2 years ago and being "unreasonable" about their asking price. Now it's the buyers' turn. It's all about supply and demand - nothing more, nothing less.
Good for you! I am not going to either.
We are putting our house back on the market November 1. And I am not lower it anymore. It is priced below appraisal and updated. I wish more people would stick to their original price. We are in a really bad market (Sarasota, FL) so it might take a long time, but I am going to wait it out.
Housing prices went up 92% in Sarasota between 2004-2006. The average price is about $350K. The median income is $40K/year. So all you have to do to buy an average house on an average income in Sarasota is save up $70K, qualify $1800/mo. mortgage (+taxes and insurance), and get used to sending 2/3 of your income to the bank.
Sellers sticking to their prices isn't going to fix what's wrong with that picture.
Sellers need to realize that what goes up, also goes down, and that if they aren't willing to sell their houses for prices buyers can afford, they won't sell them at all.
Housing prices went up 92% in Sarasota between 2004-2006. The average price is about $350K. The median income is $40K/year. So all you have to do to buy an average house on an average income in Sarasota is save up $70K, qualify $1800/mo. mortgage (+taxes and insurance), and get used to sending 2/3 of your income to the bank.
Sellers sticking to their prices isn't going to fix what's wrong with that picture.
Sellers need to realize that what goes up, also goes down, and that if they aren't willing to sell their houses for prices buyers can afford, they won't sell them at all.
We are also in SWFL & refuse to purchase a home here. We had to move here due to job circumstances. Homes are so ridiculously overvalued throughout SW FL it is not even funny. Areas of Naples are STILL seeing asking prices at 75% over value!!!!!!!!! Ridiculous.
I don't think every area of the country is suffering the same way SWFL is though there are many areas exactly in the same predicamnet as SW FL.
Some does depend on where you live. Where we are moving has not seen such a ridiculous jump in prices but there is still a lot of inventory in the surrounding areas. Homes are very affordable & asking prices are not extraordinary.,..there is just a tremendous amount of choice.
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Unfortunate
