Can you justify losing money selling your house right now...

because it's so much better to buy these days?

I can't win this argument with DH. He says we can afford what we can afford and that doesn't change. And all he sees is, the money we will lose. In my mind, living in this townhouse, the market is not gonna get much better even IF it gets better. We're never gonna sell it for what we paid. No way. Especially when a brand new complex opened up in the area.

DH is an accountant so I am far inferior when it comes to numbers. I need strong arguments here!!! My friend made a good point- that yes, we're losing money on our townhouse, but the person selling THEIR house is losing that much more, so it evens out.

But DH looks at the monthly mortgage payment, which I guess makes sense too.

Help!!! TIA!

Message edited 3/12/2011 9:11:44 PM.

Re: Can you justify losing money selling your house right now...

My DH & I are both CPA's - and due to tax season I'm exhausted and can't write a well thought out response, but I will say this...

we are selling and we are taking a substantial loss because we can now afford the house in the neighborhood we wanted 5 years ago when we bought this one. Not because we are making more money, but because of the decrease in mortgage rates and the the decrease in the house price it is now more affordable. It's going to hurt taking cash out of our pocket to sell this house, but we are getting so much more of a house for a similar mortgage payment.

You are are taking a loss, but getting a bigger discount on a more expensive home.

Re: Can you justify losing money selling your house right now...

absolutely not, we would lose SO much and in fact even be negative once realtor fees and such were paid.

We bought a 3BR co-op in Smithtown at the peak of the market for 245K. At the time, homes were through the roof and we were like, where will you find a 3BR anything in Smithtown for 245K, so we jumped at it.

We put it on the market when it first started to tank with no luck and took it off. Similar units are now going for 50K to 75K less than what we paid. In the grand scheme of things, it doesnt seem like a lot, but when you consider how much we paid, thats 20%+ less.

So we are stuck here, trying for another baby in cramped quarters bc we cant put our lives on hold. Its so frustrating bc we can totally afford to buy another house, but arent willing to lose so much.

We are lucky in the sense that its 3BR, 1100 square feet and in Smithtown, so it could be worse. The other upside, is we didnt "overbuy" when the market was inflated, so we arent house poor by any means, I mean we only have a mortgage on 245K less our down payment so that side of it is nice.

Message edited 3/12/2011 9:57:00 PM.

Re: Can you justify losing money selling your house right now...

I look at it like this.

We are in a co-op. When we sell we will lose money but we will be getting a home that would have cost us $100k plus in the height when we bought our co-op.

So IMO it is worth the loss bc when prices go back up the home we buy will be worth more than we paid.

Re: Can you justify losing money selling your house right now...

Message edited 3/12/2011 10:58:40 PM.

Re: Can you justify losing money selling your house right now...

I look at this way

You may lose money on your house but you are getting a great deal on whatever house you buy - why not upgrade if you can get something nicer for the same amount

Re: Can you justify losing money selling your house right now...

There are two benefits; everything cost less and the rates are low. You may lose money on your townhouse but you are spending less to buy your next place and spending less to finance it too.

Re: Can you justify losing money selling your house right now...

you will only lose if you don't buy anything else.

If you sell low your current house, you will buy low also for another house.

But if you just sell and not buy anything else, then yes, you will lose money.

Re: Can you justify losing money selling your house right now...

If you are trading up it is always better to buy in a down market. Let's say your townhouse is worth $100k and the house you are looking at is worth $200k. If your husband is waiting for the market to go up say 10% then when you sell your townhouse you will get $110k but now you will have to pay $220k for the house that you want. Now you are out $10 k more on the net result of the transactions. Whatever you've lost, it's gone. No point in waiting to trade up as long as you have the liquid assets for the new downpayment.

Re: Can you justify losing money selling your house right now...

Yes. We plan on selling our house in a couple of years even if that means we take a hit. I think it is worth it because if you are taking a hit on your current home you are also getting a great deal on something else. It will end up equaling out. IMO the only way you would lose money is if you did not buy anything else.

Re: Can you justify losing money selling your house right now...

Yes, I think it's justifiable as long as you can afford the loss, and have the money for a downpayment on a bigger home.

Re: Can you justify losing money selling your house right now...

I think you would come out ahead if you sold. As everyone else argued so well, you will sell for a little less than you would have a few years ago, but you will be able to buy so much more than you would have been able to in that market.

Plus, you willl benefit from the still-low interest rates, not only for your own purchase of your next home, but also because there are so many buyers looking to buy now and get their foot in the door of home ownership. Many won't be able to afford (or want the responsibility of) a single family home at this point, so they will be looking to buy townhomes (or condos or co-ops). So you will have a bigger buyer pool interested in your townhome than you might have had in a different market.

Finallly, I talk to a lot of sellers who want or need to sell, but want to wait out the market so they can get more. All of the mortgage people I deal with have assured me that:

1) The housing market is not going to shoot back up in the near future. It will stay relatively flat and then start to go up again gradually. So if your dh thinks you can wait it out a year or two and get significantly more $ for your house, that's probably not going to work; and

2) The 2005 peak of the market was an artificial market, and when the market improves again, we are not going see houses selling for 2005 prices.

Re: Can you justify losing money selling your house right now...

You need to talk to your DH in percentages.

So for example - if you say the overall housing market is 20% down.

You will lose 20% on your sale but save 20% on the new place. As long as the new place is more expensive you will SAVE a lot more than you lost.

Example

Sell $200,000 home for $160,000 = loss $40,000

Buy $500,000 home for $400,000 = save $100,000

Total Savings $100,000 - $40,000 = $60,000

Re: Can you justify losing money selling your house right now...

Re: Can you justify losing money selling your house right now...

I just cant

If we sell we will lose big money

That being said, we are fixing a few things in our townhouse and we are going to rent it out. That way we are holding onto our house/investment and making some money as the mortgage is paid down

WE have the down payment for a biggwer house so we are figuring out everything now.

Re: Can you justify losing money selling your house right now...