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I've been tinkering with the idea of selling a condo I just bought a year ago, only if my net profit makes sense... Would like some insight on whether or not it's a good idea and time to sell
Here's the details:
Location: Downtown Chicago high-rise
Unit: Modern 2bd, 1 ba, den, stainless steel appliances etc.
Unit originally sold in Oct 2007 for $277k
I purchased it as short-sale in April 2012 for $178k (garage parking included), though listed at $199k
In the past 2 years, MY exact same unit's layout (different floors) sold at:
Aug 2012 for $179k
Dec 2011 for $182,500
Sept 2011 for $245k (fluke sale?)
A fourth unit (same layout) was trying to sell at $250k all of last year and eventually went to rental market for something like $1800 month.
When I initially talked to my realtor in Feb 2013 about selling, the comps in building were still pretty low ($180k ish), but a few comps in the mid-rise building next door sold in the $225k range (Same developer, same appliances, finishes, etc). Would have been tough to list at $230k I think at that time.
Now, a unit on my floor actually just closed this week at $225k (their list price!) and I feel like I have a good chance to get that much as well now.
So, listing at $225-230k and figuring maybe $15-20k in commissions, closing costs, and capital gains taxes (since it's been under 2 years), that would potentially leave me somewhere in the $210k range and a profit of $32k ish. For real estate professionals and home-sellers, would you think this amount is enough to sell? The greediness in me wants to wait until the market is strong enough to list at $250k but I feel like I could be happy with going home with $30k in change. Just not sure if condo sales generally generate that much, or less, or more since this is my first home.
It's not totally clear to me if you bought this condo as a place to live or as an investment. You realize, of course, that if you have to pay market price on the next home, your profit could vanish.
This was my first home purchase and was not an investment property (i.e. renting it out immediately). My original intent was to live in it for a few years and then eventually sell. I looked at it as my first home purchase and not my forever home.
I don't mind going back to renting if I don't find anything to buy immediately. But, I am getting emailed listings for other condos in the 185-225k range but nothing has really grabbed my attention. I guess my question just circles back to... is a ~30k profit handsome or meager for a 1 year investment? I haven't done any major improvements as everything is still pretty new/modern.
Last edited by s0nginmyheart; 05-21-2013 at 01:15 PM..
Location: Danbury CT covering all of Fairfield County
2,636 posts, read 7,429,511 times
Reputation: 1378
If you want to sell and move on after realising a quick gain, go for it. Comps in your building will have the biggest effect on your sales price, not the builidng next door. Would you have enough money for a new place after you close on the condo?
Are you thinking, "The market is ready to tank again and if you don't sell now, you will lose your gain???" Otherwise, unless you really don't like the condo and have someplace else you would rather live ... and can buy low, what's the point of selling as soon as you start to gain?
The fact that you have gained 15-20% (based on 'comps' and estimated sales costs; not money in the bank) is good ... and also likely means you probably have a good location that will appreciate further. So is your plan to 'jump' from one place to another as soon as you realize a gain ... kind of like a gypsy?
The point is: You need to determine what your strategy is before you simply start 'reacting' to gains/losses and a host of other event-driven financial decisions. Without a plan, you are like Alice in Wonderland: She asked, 'Which way do I go, which way do I go' -- the Caterpillar responded, 'Where are you going?' Alice responded, I don't really know; .... to which the wise caterpillar replied, "Then it really doesn't matter which direction you go, does it?"
I think your expenses will be higher than you are calculating. Closer to $20-$23K including the capital gains tax (and don't forget state income tax, right?), and your moving expenses to move into the next place, etc. etc.
Thanks - you guys are giving me things to think about.
I've since spoken to my realtor and he said that right now I'd probably be in the $210-215 position, and that we'd have to wait for a couple more contracts to close in the building to get $225+ plus also make sure it appraises for that much.
He also gave me a worksheet that would calculate Estimated Closing Costs (except Capital Gains) and selling at $215, closing costs came to about $15k (inclusive of ~$10k commission). Approximate Seller's proceeds were ~$25k - and per my calculations, capital gains tax was ~$5k...
(Sigh) Guess I should just wait another 10 months...
you want sell for quick bucks... not worth... i would wait 4 years.
years in 7 are good. so 2017.
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