Home Buying in 91010>Question Details

Mollygitho, Home Buyer in 91010

We are considering selling our home at a loss so that we may buy a home in an area with a better school district. Our feeling is that we may save

Asked by Mollygitho, 91010 Mon Mar 15, 2010

money in the long run by not having to send our two children to private school. Is this a feesable plan in this market?

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Absolutely, you are looking at the big picture, something many people overlook. Though you may lose money on the sale of your home, that will be recouped through the savings on public vs private school, and your money will likely be more secure in a community with better schools.

Best,
Jeanne Feenick
Unwavering Commitment to Service
My Blog: http://www.trulia.com/blog/jeanne_feenick_-_new_jersey/
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1 vote Thank Flag Link Mon Mar 15, 2010
Mollygitho:

Are you speaking about short selling your home? If you are then you will have to wait and re-build your credit before buying in that other area with improved school ratings.

You can always rent in the area you will eventually live.

Here's a site that can help you decide about the schools: http://www.greatschools.net
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1 vote Thank Flag Link Mon Mar 15, 2010
Like with all questions, the answer depends on several factors. How much of a loss and is that loss being considered as a short sale? You have to consider if you can qualify for a home in the other area. As long as you have the down payment and credit to support the purchase of a new home and the sale of your current home won't negatively affect your credit, then it might be a good idea. Of course, it is hard to place a dollar value on quality of life. A short period of being in the red may be worth it in the long run. There may be some tax advantages but you will need to consult a tax advisor on that.
1 vote Thank Flag Link Mon Mar 15, 2010
Hi Molly,
Yes I think your plan can work and I would add that homes in areas with excellent school districts also appreciate more, and are in higher demand then those in "not so good" locations. Best of Luck to you!
1 vote Thank Flag Link Mon Mar 15, 2010
Mollygitho: I know that selling a home at a loss is not always an attractive situation. But sometimes it works out....and in your case it might. Consider that you will probably also be buying a more expensive home in a better neighborhood where schools are better. Those people selling their home are also probably taking a loss. So altough you are taking a loss...so is the seller of the new property...which means you are getting a "deal" on your new home. And it also sounds like you are planning in staying in it for several years. Hopefully within the next 5-7 years the real estate market will have evened out again and you will have gained some equity in your new home. And the good news is that you will not have to pay extra monies for private schools....Rates are low right now (which may be changing--if rates go up you wil be able to buy less house for your money) The spring/summer is a great time to sell your home and look for a new home. If you want to discuss this any further please email me or phone. I am happy to help you weight the pros and cons. Best of luck. Rose Nied Alain Pinel Realtors 510 530 7011 (Oakland, CA)
Web Reference: http://www.apr.com/rned
0 votes Thank Flag Link Thu Mar 18, 2010
Hi Mollygitho,

Forget the feeling, the numbers never lie. Do all the math... twice. Selling for a loss always sounds like a bad idea to me if it can be avoided.

Here's another thing to consider when you're doing the math. If you're going to be long term owners wherever you live and have already been in your home five or ten years, you've probably already paid well over $100k in front-end loaded interest payments. If you move (or refinance) you get to pay another huge chunk of interest without paying down much equity for another ten years. This is the 500 pound gorilla that most people don't consider when they refinance or move. Best of Luck.
0 votes Thank Flag Link Thu Mar 18, 2010
Hello Mollygitho,

Great idea. Your money will go further now and rates are good and plus you'll save money in the long run on schooling. I think it makes perfect sense. Homes in the better school districts will usually go for a better price.

Best,

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
mcarrabba@kw.com
(323) 899-2900
0 votes Thank Flag Link Tue Mar 16, 2010
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