Home Selling in 90066>Question Details

Peter Schlomo, Both Buyer and Seller in West Los Angeles, Los...

My home in 90066 has gone down in value., but so has better property. Should I sell this house..to buy a better one?

Asked by Peter Schlomo, West Los Angeles, Los Angeles, CA Wed Jun 15, 2011

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14
Hi Peter,

All kinds of considerations come into play in these kinds of decisions, I'm an agent not a not a financial professional, but from my perch on the sidelines there seems to be one more aspect many people forget to consider when they're selling or refinancing a home ... the interest payments that have already been made.

If you've been in a home for ten years in 90066 you may have already put a couple of hundred thousand dollars into interest payments on your property and not paid off too much equity. When you buy a new home you're essentially throwing this money out the window and restarting the clock all over.

This can be fine if you have other good reasons for making the move, but it should never be forgotten when making the decision. A poor decision in this regard can be particularly tragic in the case of refinancing for the sake of improving monthly payments by a few hundred dollars a month or to get money that could as easily be gotten with a home equity loan.

The standard rationale is that it isn't really an issue because everyone buys a new home every ten years anyway and appreciation is the main ingredient of profitability in real estate. Somehow, the expectation that nobody will actually ever own anything seems fundamentally flawed. Be careful & Best of Luck.
2 votes Thank Flag Link Mon Jul 4, 2011
This is a very good and well thought out answer for this client. Well done!
Flag Mon Nov 19, 2012
It has never been a better time to upgrade your home. Lower market prices and loan interest rate make it perfect for you to upgrade. I would suggest first to find a house and make and offer subject to you selling your home.
Good luck
1 vote Thank Flag Link Wed Jul 6, 2011
That's a difficult questions not knowing your situation too well... Are you gonna loose the money selling your current house or you still have some equity? As we all know it's a great time to buy but in the same time it's a bad one to sell. What I would personally do (if my financial situation allow me to do that) I would get a new better house and rent my current one for about 2-3 years and then sell it. Experts say in 2-3 years we may be facing housing shortages. This fact and economy getting back on track (hopefully) will drive prices up.
And who knows... maybe you'll like being a landlord! :)

Ewa Reza
Realtor at Milbank Real Estate Services
cell: 323-455-7575
ewareza@gmail.com
1 vote Thank Flag Link Wed Jun 15, 2011
Hi Peter !

Yes,it is almost always better to buy & sell in a down market ! Your taxes will be lower forever ! If the interest rates go down ,you can always re-finance ! Good Luck !
0 votes Thank Flag Link Sat Jan 11, 2014
Why not run your projected numbers by a lender, and see if you will even qualify for a new loan?


David Cooper Foreclosure Specialist with 35 Years Investingh Experience. Receive a FREE List Daily of Low-Priced, Bargain Homes for Investors, go to website or Call +1-702-499-7037
0 votes Thank Flag Link Fri Aug 12, 2011
If you want a real professional opinion it's best to meet with a local expert. I live in the 90066 area and can help just contact us to get a true picture of values we can help you plan your future. http://www.sherrinoel.com
Web Reference: http://www.sherrinoel.com
0 votes Thank Flag Link Fri Aug 12, 2011
Why not run your projected numbers by a lender, and see if you will even qualify for a new loan?

How marketable is your home in 90066? Just because you are thinking of selling it, doesn't mean you will be able to sell it for the price you want without discounting it. There are the commission and fees in selling a home that will also eat into you net. Also, the qualifications for getting a new mortgage are really tighter than they were a few years ago. You might not qualify for a new mortgage.
0 votes Thank Flag Link Sun Jun 19, 2011
Dear Peter,

Wow good question and one that is often asked. If your home has equity you could actually sell and move up to a better home in a more desireable area and get that home for "less" then what it might have sold for in years past, and consequently make a profitable business decision.
Keep in mind, the new home should be held for some time, in order for the market to balance it'self and regain its true value.
0 votes Thank Flag Link Sun Jun 19, 2011
Hello Mr. Schlomo,

As the other agents noted, it is tough to answer definitively without knowing more information. That said, moving up makes the most sense, and can be profitable. Let's take the following hypothetical situation:

If you sell a $600,000 house that was $720K (20% higher) at the height of the market, that is a "loss" of $120K.

If you buy a $1,000,000 house that was the same 20% higher at $1,200,000 you "made" $200K.

Net net your move just "made" you $80,000.

Now I know that is simplified, but a good way of looking at the situation in general.

In Mar Vista, 90066, right now, I am selling a short sale that the bank has agreed to accept $1.4M that would have definitely sold over $2M at the height of the market, so there are deals out there to be had.

Let me know if you would like to discuss the specifics of your situation further Sir, so I can better advise you.

Best Wishes,


--
Eric Smilay
West Los Angeles Realty
T: 310.600.9172
SmilayProperties.com
Web Reference: http://smilayproperties.com
0 votes Thank Flag Link Wed Jun 15, 2011
Hi Peter,

You pose terrific questions; however, I believe I could answer you better if I knew more about your situation, as well as, the exact location of your home, 90066 covers a lot of area.

To answer a question about a life changing decision deserves more than some pat answer which may or may not apply to your current circumstances.

I suggest you give me a call, so we can discuss your concerns with the time they deserve.

Thank you,

Reny Monk
Monk realty The Smart Choice!
323-315-8554
http://www.monkrealty.com
0 votes Thank Flag Link Wed Jun 15, 2011
Peter,
It all depends on your comfort level financially. Also, do you have loans and would you need to short sale. If that would be the case, I could guide you through the process, however, if you do not have a loan and you are ok with taking a loss because of the declining market, then you need to decide if you would be happier in another home. It is a great time to buy as there are tremendous deals around town when you consider short sales and foreclosures. I would be happy to show you some options. Please feel free to contact me. Thank you.
Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Wed Jun 15, 2011
You've posted questions for both selling in Mar Vista and buying in Culver City (my 2 primary areas). My question to you is: how do you envision buying if you are facing a loss in Mar Vista? Culver City has made significant improvements to its downtown area, and has a better reputation with education. There are so many options, depending on your needs. And that's what I help my clients do, focus on their priorities to get what works best for them. You could be the next one if you give me a call.
0 votes Thank Flag Link Wed Jun 15, 2011
Hi Peter,

Two factors come into play here. When did you buy? Where would you move up to? Not all markets have been affected equally, some have seen a larger drop in valuation versus others. Regardless, values are down and rates are terrific, so it is a good time to buy.
As long as you have equity in your present home, the current market devaluation is only a paper loss. It might just be a good time to move up!

Bill Hooper
bhooper@remax.net
0 votes Thank Flag Link Wed Jun 15, 2011
Peter, This is a great market to move into a larger home.

I think this will make sense to you:
There are more buyers for less expensive homes; there are fewer buyers for more expensive homes.

That means that, in most cases, higher-value homes lose more value than lower value homes because there are fewer qualified buyers the higher the price.

Good luck!
0 votes Thank Flag Link Wed Jun 15, 2011
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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