Author Topic: would appreciate your advice - stuck with a house's  (Read 22180 times)

sash

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would appreciate your advice - stuck with a house's
« on: December 09, 2013, 09:10:57 PM »
 Would greatly appreciate your advice.

We have no debt other than the mortgage. The mortgage balance is 140k on a 230k loan.

The problem is - we made a big mistake by buying a home with acerage that's very far out, in a rural area. Our commute is 1 hour. We pay dearly with our time, gas and car wear.

We have not been able to sell our house at a decent price. It's been on the market for 5 years. Our child stsrts school next year and we must move to a better school zone and closer to everything.

What to do?

1.Try to short sell it and lose money.
2.Buy a second cheap house and live there while trying to sell the first one.
3. Not move. Wait until housing market improves.
4. Rent a second house.
5. We also own a lot in a great location. Take out a second mortgage to build on the lot.



_JT

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Re: would appreciate your advice - stuck with a house's
« Reply #1 on: December 09, 2013, 09:15:01 PM »
How much equity is in the property?

If it hasn't sold for five years, you can bet it's overpriced for the market by a lot. If you have a lot of equity you may not want to take a huge loss on it, but if not that might be the easiest way out.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #2 on: December 09, 2013, 09:24:33 PM »
I don't know. It was appraised for 380k in 2007. We have it listed for 330k now, but we added a new huge detached garage.

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #3 on: December 09, 2013, 09:45:42 PM »
Wait a minute!  Why are you talking about a short sale, when you only owe $140k on it?   There is a big difference between selling it for less than you paid for it, and selling it for less than what you OWE on it (the latter is a short sale).

You've been asking too much for it, obviously.  The market has dropped a lot since you bought it, unfortunately - but on the plus side, prices have dropped in town too from 2007 prices.

How much would it cost to buy a suitable place in town where you want to be?  And how much would it cost to build on your lot?

And if you think prices are recovering in your area, how much could you rent it for while you wait for the market to recover?

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #4 on: December 09, 2013, 09:51:02 PM »
What's a "decent price?"

The house will bring only what the market is willing to pay.  What does the listing agent think the house is worth?  If you have the house listed on the multiple listing service and it is not selling, then the asking price is too high. 

Your agent should prepare a current market analysis to estimate the value of the property.  It's probably difficult to find comparable sales, but a good agent ought to be able to look at what has sold recently and what's available to give you a pretty good idea of the value.  Maybe the agent is not knowledgeable or is unrealistic.  In that case, you need a new agent. 

What the house appraised for in 2007 is irrelevant.

Once you have a realistic idea of what the house is worth, you will have a better basis  for making your decision.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #5 on: December 09, 2013, 10:03:35 PM »
How much would it cost to buy a suitable place in town where you want to be?  And how much would it cost to build on your lot?

And if you think prices are recovering in your area, how much could you rent it for while you wait for the market to recover?
to build a dream house would cost about 240k.  You can buy a modest house for 150k. Rent starts 800  per month, and we have several dogs so it will be hard to find a place.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #6 on: December 09, 2013, 10:11:14 PM »
Your agent should prepare a current market analysis to estimate the value of the property.  It's probably difficult to find comparable sales, but a good agent ought to be able to look at what has sold recently and what's available to give you a pretty good idea of the value.  Maybe the agent is not knowledgeable or is unrealistic.  In that case, you need a new agent. 

What the house appraised for in 2007 is irrelevant.

We went through 3 real estate agents and they are not giving us any good advice. Our house is very hard to appraise - it's in a rural area. It comes with 30+ acres. There haven't been any comparable properties sold recently. 

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #7 on: December 09, 2013, 10:13:13 PM »
If you can sell your current house for $290k, you can take the $150k equity and buy a modest $150k home in town outright, with no mortgage.

Then you can start saving money towards building your "dream house" on that empty lot you own, IF you decide you still need/want it.

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #8 on: December 09, 2013, 10:15:19 PM »
Quote
We went through 3 real estate agents and they are not giving us any good advice.

Are they REALLY not giving you any good advice?  Or are they just telling you what you don't want to hear - that the house is not worth as much as you think?


sash

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Re: would appreciate your advice - stuck with a house's
« Reply #9 on: December 09, 2013, 10:30:09 PM »
Are they REALLY not giving you any good advice?  Or are they just telling you what you don't want to hear - that the house is not worth as much as you think?
probably.

But what if it doesn't sell for 290? What if it's not about the price but the market?

Everyone I know who had to move is either stuck with two houses or had to do a short sale.
« Last Edit: December 09, 2013, 10:32:03 PM by sash »

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #10 on: December 09, 2013, 11:27:36 PM »
A short sale would mean you sold your house for less than $140k.  Are the realtors telling you it's worth less than $140k???

ZiziPB

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Re: would appreciate your advice - stuck with a house's
« Reply #11 on: December 10, 2013, 05:16:29 AM »
It sounds to me like you are confusing two concepts.  A house sells at a loss if it sells for less than what you paid for it.  A short sale means a sale for less than the outstanding balance of your mortgage (this is done with the approval of the lender who is agreeing to forgive the difference - there may be tax consequences for you but you would need to check on this).

In your case, it sounds like you may have to sell it at a loss but probably not a short sale.  If the house hasn't sold in 5 years that means it is priced wrong.

What the house was appraised for in 2007 is totally irrelevant.  You need to find an agent who is familiar with and active in your specific area.  Even though it is hard to find comparable sales, an experienced agent should be able to do a market analysis and recommend a realistic price.  If you are motivated, you also need to do price reductions, if the house doesn't sell right away.  So list it, if you don't get any offers in 30 days, do a price reduction, then another after 60 days and so on.  Obviously, you need to decide up front what your bottom line is and what kind of a loss you are willing to take in order to move.  If you reach that level and the house still hasn't sold, then you need to consider other options (stay put, rent it out at a loss, etc.). 

If the house is priced right for the market, it will sell.  It may be just that you are not willing to go as low as the current market requires.

Good luck!

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #12 on: December 10, 2013, 06:00:46 AM »
+1 to Izeve.  If you have been through three agents in 5 years, the house is overpriced and you are not listening.  If you must sell to move to the city, lower your price and sell.  If you are not willing to sell at current market value, move on to plan B.

sunshine

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Re: would appreciate your advice - stuck with a house's
« Reply #13 on: December 10, 2013, 08:22:45 AM »
Your agent should prepare a current market analysis to estimate the value of the property.  It's probably difficult to find comparable sales, but a good agent ought to be able to look at what has sold recently and what's available to give you a pretty good idea of the value.  Maybe the agent is not knowledgeable or is unrealistic.  In that case, you need a new agent. 

What the house appraised for in 2007 is irrelevant.

We went through 3 real estate agents and they are not giving us any good advice. Our house is very hard to appraise - it's in a rural area. It comes with 30+ acres. There haven't been any comparable properties sold recently.

Get a other agent. We sold a rural property with acerage. in the last 2 years and there had not been one for sale in our area for years. He not only got us a good price but had 5 offers in a week. He went to people he had heard were previously looking for property in the last few years.He beat a path to anyone he was told might be interested. He literally  chased them because by the time the listing hit print he had offers! The market there sucked ( as in homes sitting for years)and still does so it was our agent 100 percent. He was worth every dime!


 I agree a 2007 price means nothing. Our current home was valued higher by far when I look at zillow for 2007. I also think your price is likely too high.

Don't be afraid to offer a bonus if they can sell and close fast. Also trying to offer a lower commission is not going to make any realtor work harder. Also short contracts.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #14 on: December 10, 2013, 10:39:05 AM »
+1 to Izeve.  If you have been through three agents in 5 years, the house is overpriced and you are not listening.  If you must sell to move to the city, lower your price and sell. 

It's not that we're not listening.  We're just reluctant to lose money on it.
We've been paying mortgage for it for the last 10 years and have invested a lot of money into improvements.

Besides that there's also a fear that the housing market will bounce back to what it was in 2007 and then we'll have lost a 100K by selling it cheaply.

_JT

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Re: would appreciate your advice - stuck with a house's
« Reply #15 on: December 10, 2013, 10:44:31 AM »
But I asked you in the very first response what your equity is and you don't know. So you're complaining that you can't sell your house, you don't want to take a loss, you're worried that the market will shoot up, and you don't have a clue what your losses would even be if you sell for a fair price now.

So your choices are to continue to bet on appreciation and hemorrhage money through horrible commutes, or sell your house for what it's currently worth and then the world is your oyster. Build on your lot, buy a new place in town, rent something cheap while you save some money up, or sail around the world in a hot air balloon.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #16 on: December 10, 2013, 10:47:19 AM »
Quote from: sunshine link=topic=11333.msg179575#msg179575

Get a other agent. We sold a rural property with acerage. in the last 2 years and there had not been one for sale in our area for years. He not only got us a good price but had 5 offers in a week. He went to people he had heard were previously looking for property in the last few years.He beat a path to anyone he was told might be interested. He literally  chased them because by the time the listing hit print he had offers! The market there sucked ( as in homes sitting for years)and still does so it was our agent 100 percent. He was worth every dime!

Don't be afraid to offer a bonus if they can sell and close fast. Also trying to offer a lower commission is not going to make any realtor work harder. Also short contracts.
Which state are you in?  Man, I wish we had such a realtor.

We've had 3 realtors and current one has brought several people to look at the property, but no one has made an offer. But in general, they are active in the first few weeks, and after a few month we never see or hear from them.  How do we fire a realtor in middle of a contract? 

Would it make sense to offer 3% to the buying agent? 

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #17 on: December 10, 2013, 10:54:32 AM »
But I asked you in the very first response what your equity is and you don't know. So you're complaining that you can't sell your house, you don't want to take a loss, you're worried that the market will shoot up, and you don't have a clue what your losses would even be if you sell for a fair price now.

So your choices are to continue to bet on appreciation and hemorrhage money through horrible commutes, or sell your house for what it's currently worth and then the world is your oyster. Build on your lot, buy a new place in town, rent something cheap while you save some money up, or sail around the world in a hot air balloon.
Well, how do I find out the equity?  I don't know what it's worth.

Realtors give us completely different price suggestions, that vary +/- 90k.  We had two appraisals prior to 2007 and the difference between them was 100K, as well.

I tried to do my own calculations: original price + inflation - depreciation + cost of improvements = $310K.

But we must move, we must. It's a beautiful house, and a beautiful location, but the commute is killing us.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #18 on: December 10, 2013, 10:57:20 AM »
I also wonder about this: what if we buy a second house, board this one up and save it for the retirement? But then we have to pay 3 property taxes and it would require maintenance, wouldn't it?

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #19 on: December 10, 2013, 10:58:42 AM »
1)  The housing market is not bouncing back to 2007 levels anytime soon.  However, if you sell now, you also get to buy your new home at today's depressed prices, so the loss is not as big as you think (remember, if your house goes up in value, so will the modest houses in town).

2) IF - big if - housing prices are starting to recover in your area (what state are you in?  I'm in So Cal and prices in my neighborhood have finally started rising from their bottom over the last year), then you might consider staying put for another year or two.  I don't recommend buying another house and risking being on the hook for two mortgages.

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #20 on: December 10, 2013, 11:00:45 AM »
Bounce back after five years of trying to sell????  Phoenix bounced back.  Las Vegas bounced back.  The inland empire of California bounced back.  Where you are has not.  What factors could make your market recover?  Is employment, especially higher paid employment, increasing?  Are companies building new plants and offices?  Have prices closer in to the city fully recovered, forcing buyers to go further out to be able to afford a house?  Unless you can point to a broader economic recovery and a lot of growth, you may be waiting a long time.  Furthermore, anything you buy as a replacement, especially closer in, is likely to appreciate as well if prices recover.

No one will buy your house if it is overpriced.  They will go down the road and buy the house that's correctly priced.  The best agents aren't going to want your listing unless they think you can be convinced to drop the price to what buyers are willing to pay.  It's a waste of their time.

Real estate is illiquid and markets are cyclical.  In some places, the cycles are very long.  It could be 20 years before you reach 2007 values.  You can drop your price, or you can buy/rent cheap closer in and wait.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #21 on: December 10, 2013, 11:02:07 AM »
what state are you in?  I'm in So Cal and prices in my neighborhood have finally started rising from their bottom over the last year), then you might consider staying put for another year or two. 
We're in North Alabama.  It looks like there's a year's worth of inventory out in the market.

sunshine

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Re: would appreciate your advice - stuck with a house's
« Reply #22 on: December 10, 2013, 11:02:25 AM »
Quote from: sunshine link=topic=11333.msg179575#msg179575

Get a other agent. We sold a rural property with acerage. in the last 2 years and there had not been one for sale in our area for years. He not only got us a good price but had 5 offers in a week. He went to people he had heard were previously looking for property in the last few years.He beat a path to anyone he was told might be interested. He literally  chased them because by the time the listing hit print he had offers! The market there sucked ( as in homes sitting for years)and still does so it was our agent 100 percent. He was worth every dime!

Don't be afraid to offer a bonus if they can sell and close fast. Also trying to offer a lower commission is not going to make any realtor work harder. Also short contracts.
Which state are you in?  Man, I wish we had such a realtor.

We've had 3 realtors and current one has brought several people to look at the property, but no one has made an offer. But in general, they are active in the first few weeks, and after a few month we never see or hear from them.  How do we fire a realtor in middle of a contract? 

Would it make sense to offer 3% to the buying agent?

I am in WI. I refused to sign more than a 60 days contract and offered the full 6% plus bonus if he could get an offer in 30 days that went through closing. It sure worked as we had 5 offers and a bidding war.  I dont know about how you get rid of one if you are in a contract.

Also when you get a new one do some research. Dont just pick one from a list. Interview several and see what they all have to say. Check their sales records and reviews. Ask for references and  call them.

We have sold several times and so far these guidelines have worked well.

Why would you offer 3% to a buying agent? I'm confused?

Cromacster

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Re: would appreciate your advice - stuck with a house's
« Reply #23 on: December 10, 2013, 11:03:54 AM »
Based on what you said: 310,000 estimated value - 140K remaining on Mortgage = 170,000 Equity.

But yea you need a new appraisal if you want an accurate one to reference.  Anything you are quoting from 2007 is...well do you remember 2008?  Granted each location was impacted differently but for the most part everyone took a hit.

It sounds like the price you are trying to sell if for is to much.  The time you have been trying to sell it is the main indicator.  It really doesn't matter what it was worth, the amount of improvements you have done, how beautiful it is.  If no one wants to pay 310,000...you are going to have to sell it for less and possibly at a loss.

A
But we must move, we must. It's a beautiful house, and a beautiful location, but the commute is killing us.

Find the price that will sell the house...

sunshine

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Re: would appreciate your advice - stuck with a house's
« Reply #24 on: December 10, 2013, 11:05:29 AM »
I also wonder about this: what if we buy a second house, board this one up and save it for the retirement? But then we have to pay 3 property taxes and it would require maintenance, wouldn't it?

I think that is a bad idea. If you absolutely couldn't sell it and could easily afford multiple mortgages ( which would scare the crap out of me!) why wouldn't you use it as a rental?

Also your realtor should be telling you what is actually worth. If you really want to know spend the $150 for a private appraisal.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #25 on: December 10, 2013, 11:07:39 AM »
Why would you offer 3% to a buying agent? I'm confused?
To motivate the buying agents to show the house.
Thanks for the tips.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #26 on: December 10, 2013, 11:12:05 AM »
I think that is a bad idea. If you absolutely couldn't sell it and could easily afford multiple mortgages ( which would scare the crap out of me!) why wouldn't you use it as a rental?
Because we're afraid renters will destroy the house or have a meth lab or something. Plus we hear horror stories from other people about dealing with unpaid rent and eviction process.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #27 on: December 10, 2013, 11:15:25 AM »
OK, I sent our realtor an email asking to start lowering the price, by 20K initially.
She's not responding - I haven't heard from her for weeks.

In what increments do you think we should lower?

Do you think it's a good idea to offer a commission to the buying agent?

MKinVA

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Re: would appreciate your advice - stuck with a house's
« Reply #28 on: December 10, 2013, 11:17:47 AM »
Is it possible to auction it? I know in some areas of the country this is like telling everyone your house is falling down with critters nesting in it, but in other areas, it is a common practice giving the seller a date certain for when they will move. Find an real estate auctioneer who specializes in country estates (see how much better this sounds than lots of acreage in bum*uck egypt?), set up an auction for a date certain, bidding starting at $$ (amount you can live with). You have to get rid of your emotional attachment to the 2007 appraisal. Erase it from your memory. Move forward. Like others have said, you are selling into a down market, but you are also buying into a down market. See the good.

Frankies Girl

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Re: would appreciate your advice - stuck with a house's
« Reply #29 on: December 10, 2013, 11:19:31 AM »
Why would you offer 3% to a buying agent? I'm confused?
To motivate the buying agents to show the house.
Thanks for the tips.

I've used a buyer's agent before... they usually already get a 3% commission (in my area they split the 6% commission that is standard between the selling and buying agents if they are two different people).

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #30 on: December 10, 2013, 11:21:50 AM »
Boarding the house up is not an option.  Your insurance will not permit that.  You will have to sell or rent.  I suspect you are in an area of declining government employment, Huntsville.  If I lived in Huntsville, I would look seriously at selling for what I could get and renting until the market stops dropping.

Your value calculation is not the value calculation made by buyers.  Buyers look at their income and what they can afford. Your cost is not a factor.  If there is a lot of inventory (probably a lot more than a year's worth for what you own), they are picky and make low offers.  There's a saying in real estate:  Sellers set price and buyers set value. 

Sunshine is absolutely right.  A 60 day listing contract and a bonus to the selling agent.  If six percent is standard commission, offer the buyer's agent another $1,500 if the house closes within 60 days of contract.  Price it right from the beginning.  If your current agent is not responding, call the broker and tell the broker you want to fire them for not doing the job.  If you don't take action to get the house sold, plan on renting the house out or staying put for a long time.
« Last Edit: December 10, 2013, 11:23:21 AM by Another Reader »

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #31 on: December 10, 2013, 11:22:13 AM »
By the way, an appraisal costs $400 in our area. So I don't know if it's worth it or not.

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #32 on: December 10, 2013, 11:25:12 AM »
A good agent will do a better job pricing the house than an appraiser.  Appraisers look at history.  Agents look at the current market and talk to active buyers and sellers every day.

sunshine

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Re: would appreciate your advice - stuck with a house's
« Reply #33 on: December 10, 2013, 11:26:54 AM »
I think that is a bad idea. If you absolutely couldn't sell it and could easily afford multiple mortgages ( which would scare the crap out of me!) why wouldn't you use it as a rental?
Because we're afraid renters will destroy the house or have a meth lab or something. Plus we hear horror stories from other people about dealing with unpaid rent and eviction process.

I know tons of landlords. We are in the process of buying a cash rental right now. Yes there are some bad eggs out there for sure. However I do believe the good outweigh the bad or there would be no landlords.

I would personally be calling your agent instead of email. It is far easier to ignore email than a phone call. If you dont get the appropriate response I would call the agency and talk to the owner/boss. Without customers they have no business.

Commission would already be split with a buyers agent if one is involved. You could offer a bonus that would cover the agent that actually brings a sale to the table.

No mater what you decide to do with your current home weigh the finances of it heavily if you buy yet another home without this one sold. I know nothing of your finances but have bought from a seller in that position and got the property for an absolute steal because they could NOT afford to keep two property's up long term and needed out like yesterday. If you can easily afford it then you have more options.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #34 on: December 10, 2013, 11:27:41 AM »
I suspect you are in an area of declining government employment, Huntsville.
Not exactly declining. The town has been growing rapidly, we've had a wave of new military, space business coming in.

sunshine

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Re: would appreciate your advice - stuck with a house's
« Reply #35 on: December 10, 2013, 11:29:05 AM »
Why would you offer 3% to a buying agent? I'm confused?
To motivate the buying agents to show the house.
Thanks for the tips.

I've used a buyer's agent before... they usually already get a 3% commission (in my area they split the 6% commission that is standard between the selling and buying agents if they are two different people).

That is why I was confused. I already knew they split. We signed a separate contract with our agent to also work as a buyers agent on our purchase. He got 6% plus bonus for the home he sold for us and 3% of the home we purchased. I thought OP was suggesting another 3%.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #36 on: December 10, 2013, 11:30:52 AM »
Commission would already be split with a buyers agent if one is involved. You could offer a bonus that would cover the agent that actually brings a sale to the table.
Right. I was talking about additional 3% commission some sellers offer to  the buying agent. But a cash bonus of 1500 sounds better, cheaper.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #37 on: December 10, 2013, 11:33:16 AM »
Thank you all for feedback. It really helps to see the whole thing with a fresh set of eyes.

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #38 on: December 10, 2013, 11:36:12 AM »
I thought NASA cut way back.  As an outsider, what I read and see on the news about Huntsville's economy is all negative.  If the employment in the area is growing, why aren't houses selling? 

Sunshine is right.  Get the agent on the phone and find out if they are willing to tackle this project with renewed enthusiasm.  If not, it's time to move on.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #39 on: December 10, 2013, 12:13:34 PM »
I thought NASA cut way back.  As an outsider, what I read and see on the news about Huntsville's economy is all negative.  If the employment in the area is growing, why aren't houses selling? 

http://blog.al.com/breaking/2013/04/huntsville_among_top_20_cities.html

They're selling, just not very fast and not where we live. We live outside the city, in a rural area, like I said.

Here're the housing numbers: http://athomeshuntsville.com/realestate/2013/10/25/huntsville-real-estate-q3-fy-2013/
« Last Edit: December 10, 2013, 12:18:38 PM by sash »

_JT

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Re: would appreciate your advice - stuck with a house's
« Reply #40 on: December 10, 2013, 12:36:03 PM »
Given your numbers and stated needs, I'd forget about recouping your improvements. Traditionally, you're lucky to get 50% return on improvements, and your area is so depressed I don't think you'll get that.

Your mortgage is for 230k, and you owe 140k still, so I'd price at 280k, take the equity + profit and buy something where you want to be. It sucks to be in a market where housing prices drop out from under you, but you could be a lot worse off. I have friends in SoCal who are having to short sell their house and take the credit hit just to move out of state and take a new job.

emaren

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Re: would appreciate your advice - stuck with a house's
« Reply #41 on: December 10, 2013, 02:25:03 PM »
I have a similar situation (the entire town is dying though), but only 7 acres and not that far of a commute.  My house is on three lots.  I have been contemplating selling the house and the lot it is on to pay off the mortgage.  Then I will own the other two lots clear and can eventually sell them to try to recoup my original purchase price.  In your case it sounds like you could probably sell for more than $140k with a bit of land so you could have your down payment for a new house as well.  You would still own some land too so you could build when you retire if you wanted to move back to the country.  I don't actually know how hard this is to deal with a mortgage company on splitting the deeds when you pay it off, but I'm assuming (hoping) it's possible.

Argyle

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Re: would appreciate your advice - stuck with a house's
« Reply #42 on: December 10, 2013, 03:15:36 PM »
A real estate agent friend of mine says "There are no unsellable houses, there are only overpriced houses."

What you know is that $330,000 is too much for your house.  Maybe it should be worth more, but houses are worth one thing and one thing only -- what someone is willing to pay for them.  It could be a gorgeous palace with 100 acres but if someone only wants to pay $280,000, then that's what it's "worth."

It's true that prices could go up and eventually they will, but whether that's in three years or in twenty years or in two hundred years, who can know?  But right now you're hemorraging money and the commute is driving you insane.  It sounds as if it's time to unload.  You won't actually have to pay any money to get out from under, it sounds like, so that's good.  Consider the money you're upside down on as having paid rent for part of the time you lived in the house.  Now you'll pay off your mortgage and have some left over, and you can nab a good house in town at a good rock-bottom price.

frugaldrummer

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Re: would appreciate your advice - stuck with a house's
« Reply #43 on: December 10, 2013, 03:33:37 PM »
It's interesting that the median home price on that link you posted, is pretty much the same now as it was in 2007.  In fact, there wasn't all that much change in median home prices in Huntsville, it looks like - nothing like the crash here, where homes dropped by 30-40%.

So - that means either A) you ridiculously overpaid for your house when you bought it, or B) there's some other reason why your house isn't selling.  Does it show well?  Clean, well-decorated?  Does it need upgraded paint or flooring?  Do you have lots of beautiful pictures on the real estate online listing?  How about a video tour?

I've seen lots of houses that were dirty, cluttered, or needed basic repairs.  It's surprising, but most people CANNOT see past that stuff, even if it's just superficial cosmetics.  (My ex and I could, so we always got great deals on houses and made money on them by fixing up the cosmetic stuff.  We always sold our homes for top dollar by decluttering them, staging them perfectly, including lighting, flowers and smells (fresh baked cookies anyone?) etc.

Daleth

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Re: would appreciate your advice - stuck with a house's
« Reply #44 on: December 10, 2013, 07:43:13 PM »
Are they REALLY not giving you any good advice?  Or are they just telling you what you don't want to hear - that the house is not worth as much as you think?
probably.

But what if it doesn't sell for 290? What if it's not about the price but the market?

It's never "not the price but the market." In other words, if the market is terrible then the price must plunge in order to sell--but it will sell if you price it low enough. If you can't price it low enough (i.e., if you owe more on it than it's currently worth), then your only options are (1) short sale and (2) be stuck with it. But there's a massive, massive distance between what you owe on it and what it's priced at--that's the margin within which you have to move, in order not to be stuck with your one-hour commutes and bad schools.

What price have realtors suggested recently?

By the way, I'm not a fan of the "drop it by $20k increments" approach. A good realtor should be able to tell you how your market is, but in my area, doing that makes you look desperate (which you are, but why show it?) and invites lowball offers. In my area, the strategy would be to take it off the market, get the best realtor around, tell her you want it sold in X time and ask what price it would need to be at and when you should put it on the market. (She will probably say to wait for spring, timing-wise, and it certainly looks way better on the "we're NOT desperate" scale to take it off the market for a few months and then put it back, rather than leaving it on the market at ever-lower prices.)

Everyone I know who had to move is either stuck with two houses or had to do a short sale.

...because they owed more than it was worth. That's not your situation.

It's not that we're not listening.  We're just reluctant to lose money on it.

Too damn bad. That's what happens when you buy at the height of the market. I feel for you--I've had dear family members in your situation, and it sucks--but after five years of this, you just have to face reality.

I tried to do my own calculations: original price + inflation - depreciation + cost of improvements = $310K.

That's not the right calculation. When you start with a normal house (as opposed to some handyman's special that a house-flipper might buy), you almost never get back the cost of the improvements you make to your home. Best-case scenario, for certain improvements (e.g., a well done classic or trendy kitchen remodel, or a fresh coat of popular paint colors throughout), you might get 75%-88%-ish back. In other words if it cost you $10k, you might get $7500-$8800. And those are the highest-return improvements you can make. Improvements don't pay you back what they cost or more unless you took a handyman's special in a great location and turned it into a fully updated and nicely finished home. 

Besides that there's also a fear that the housing market will bounce back to what it was in 2007 and then we'll have lost a 100K by selling it cheaply.

What's it costing you, in dollars, to have one-hour commutes? What will it cost you, in dollars, to put your kid in a private school (and commute to that school) to make up for not having good school options where you are?

And more crucially, what is it costing you in terms of TIME taken out of your brief span here on earth (are you going to look back on your deathbed and fondly reminisce about the thousands of hours you spent commuting, instead of with family or doing things you really enjoy)? And what's it costing you in stress? Only you can put a price tag on it, but it certainly has a price. A big one.
« Last Edit: December 10, 2013, 07:57:43 PM by Daleth »

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #45 on: December 10, 2013, 07:59:47 PM »
So - that means either A) you ridiculously overpaid for your house when you bought it, or B) there's some other reason why your house isn't selling.  Does it show well?  Clean, well-decorated?  Does it need upgraded paint or flooring?  Do you have lots of beautiful pictures on the real estate online listing?  How about a video tour?
Beats me.  We didn't overpay for it at all, we got a great deal on this place.
I think it is overpriced a little bit right now. We bought it 2001 for 230K.  We just added a brand new huge detached brick garage with workshop. So I feel justified selling it for 330K.

It's cleaned perfectly for each house showing, it's a beautiful house. It shows really well. It's de-cluttered. However, many people have seen it and no one has made an offer yet.

The wood floors may need to be redone - there are some scratches, the appliances are 15 years old, but look decent, the paint looks OK.

The problem is there are few people want to live that far into the country.  For people who work in Huntsville and can afford it it's too much of a commute.  For local country folks it's way too expensive.

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #46 on: December 10, 2013, 08:05:29 PM »
What you feel is justified has nothing to do with what buyers will pay for the property.  Buyers neither know nor care about your costs.  You need to get past this thinking and figure out what buyers will pay or you will not sell this house.

sash

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Re: would appreciate your advice - stuck with a house's
« Reply #47 on: December 10, 2013, 08:08:45 PM »
Quote from: Daleth link=topic=11333.msg180040#msg180040

What price have realtors suggested recently?
Our current realtor was on board with selling it in the 360K range.  We're the ones offering to reduce the price - she is not suggesting it.  But we've had quite a few showings and no offers.

Quote
What's it costing you, in dollars, to have one-hour commutes? What will it cost you, in dollars, to put your kid in a private school (and commute to that school) to make up for not having good school options where you are?
We spend $400 a month on gas + wearing out our cars + cost of private school for the child + our time (which is most valuable)

So yes, it's probably best to just cut our losses and move on.


sash

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Re: would appreciate your advice - stuck with a house's
« Reply #48 on: December 10, 2013, 08:12:19 PM »
What you feel is justified has nothing to do with what buyers will pay for the property.  Buyers neither know nor care about your costs.  You need to get past this thinking and figure out what buyers will pay or you will not sell this house.
I don't know what buyers are thinking.  For this price you can buy a nice house in town, but without the acreage.  A place like this with acreage in city limits would cost a million.

I have looked at other properties for sale with acreage and ours seems on the less expensive side.

Another Reader

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Re: would appreciate your advice - stuck with a house's
« Reply #49 on: December 10, 2013, 08:31:07 PM »
People are looking at it but not making offers.  That means it's overpriced.  You are not the buyer, the people looking at the house are the buyers and they are not making offers.

If you are having regular showings but no offers, you are above the point buyers feel comfortable making an offer but you are probably not way out of line.  If you are having no showings, you are grossly overpriced.  Buyers are looking at the pictures online and not bothering to make an appointment because there are much better houses for them available at that price.

Your agent should be soliciting feedback on showings and telling you about the comments.  You and the agent should agree to reduce the price based on buyer feedback and competing properties.  Showings should pick up.  If you still don't get offers, repeat the process.