It is not advantageous to sell low at any time. If you can afford to stay in your home until this Real Estate cycle balances out and home values improve, then by all means stay where you are. If you can easily sell, in this market for $700...then when home values correct, your home will be worth much more. You can then sell the property and splt your share which will also be much higher . You would still be able to rent if necessary, or purchase a condo at a later date.
You have received some very good & sound advice from the professionals below. However, as you have noticed you have an individual by the name of GOAT offering their advice. Clearly this person is not a licensed Realtor based on his irresponsible advice not only regarding the Real Estate market, but also the Financial market as well. This persons clear goal is to bash Realtors and nothing more. Good luck with whatever decision you ultimately make.
I didn't say 2 years ago was a good time to buy, I said I believe right now is. Some people are renting right now for close to what their monthly mortgage payments could be. If they bought, they would receive tax benefits, build equity and over time (nobody has a crystal ball) see appreciation on their properties. Does this seem like a good opportunity to buy to you?
I do not believe I have a "tiger by the tail" with my other 2 properties because I bought them knowing the prices could fluctuate up and down. I set aside plenty of reserves for them to take care of themselves. Show me a person that buys 2 properties a year for the next ten years, and you and I will sit down ten years from now and discuss the incredible wealth they've built.
I sense that you and I are not going to agree on much real estate wise, but to talk down on all realtors is nonsense. I've been to bad doctors, dentists, lawyers, and financial planners over the years but I have met and know there are great ones out there. You just have to find them!
I believe now is a great time to buy and I'm putting my $$ where my mouth is and buying. I bought 2 properties over 2 years ago, and although their values have dropped, they are still manageable and cash flow! No complaints my way, plus I get some tax benefits I wouldn't have otherwise.
If you are comfortable making payments, and can afford a place you like, why throw money away renting?
Some people are renting for close to the mortgage amount they could buy. That would be an advantageous position to try to get in the market. People can save up for years and never have the cash to outright buy a home, but they can build equity over the years in several properties and increase their net worth 10 fold.
I have several friends that share your beliefs although they know me and trust that I have their best interests at hand. On many occasions I've told buyers NOT to buy property because I didn't think the property or the price made sense!
I know I will continue to buy and can't wait for my next purchase!! :)
Keller Williams Realty
1) Disagreeing with Realtors just because they are Realtors makes no sense at all. Not all said or did what he is accusing them of doing. And they were never fortune tellers. It is not just about profits, but about making sense for each client and their particular needs and creating clients that trust in our expertise in all kinds of markets. With Goat's reasoning you may as well fire your stock broker, accountant and lawyer for the same reasons and stick your money under your mattress. Wait, that is what he is saying to do.
2) Yeah, buying with cash will get you the best deals for your money, but there are many reasons why buying with a mortgage can be advantageous. Including great tax benefits and using leverage in your favor. You may have other places you want your money to be working for you. And waiting for super high interest rates might take years when you would like a place to live that is your own. Plus saving up the amount of money to buy with cash in LA is unrealistic.
3) I tend to agree with your sell low and buy low concept. Yeah you may not be selling at the top of the market, but you are also buying at what could be fairly close to the bottom. Plus you are getting out of a bad situation which is tethering you to your ex. I would think that a clean slate would be the best way to move on to the next chapter of your life. The point is you need a place to call home and a way to get on with your life. We can never know the exact lowest point of the bottom. If we did we would all be millionaires. The point is to move on with your life and be happy.
4) I agree with you that you will not qualify for the tax credit, so I am not sure why everyone is still talking about it.
5) You have not mentioned being in debt. Why would you buy gold and silver at its all time high? Rents are crazy in LA and you would lose all tax benefits of owning and adding to your principle each month.
Yeah, so I totally disagree with Goat!
I can understand if you wanted to wait out this bad market to sell when the prices are higher again. However that could be years from now and the prices you would be buying at would be higher too.
I believe, if you have that much equity in the house where you and your ex can get out with a nice sized nest egg to start fresh... Do it. Start anew. We can find you a nice condo or even a home for that price (depending on the area you wanted to move to).
Please call me if you have any questions. I wish you luck and much happiness in your exciting new life.
I'm not sure that you'd qualify for the first time home buyer tax benefits (because you currently own a home) but certainly check with your accountant.
Nobody knows where the market will go, but it sounds like for your situation it might be best to sell now, take your equity and purchase another lower priced property to take advantage of the low interest rates. In your trade off of selling your current place, you will find some great deals on the lower end and you can help ensure that you stay in the market. In my opinion, that is probably your best option but you'll have to evaluate your finances and see what you're comfortable with.
Good luck to you and I'm available if you ever have any questions.
Keller Williams Realty
Sorry to hear about your separation.. As you are well aware, the market has been declining for some time - nobody really knows for sure how much lower property values will decline, and all markets are different, so what may be the case in one area may be different in another. There are pros and cons to both scenarios - If you wait to sell, you run the risk of losing additional equity if the market value declines further - buyers are certainly out right now buying property, so properties are certainly selling when priced correctly. If you sell your home now and buy another, you of course run the risk of the property you purchase declining a bit more in market value, but if it is a home you love and are planning to live in for some time, there is certainly some EXCELLENT values out there right now. Combined with the low interest rates that are out there, even if properties were to decline in value further, it still may be cheaper in the long run to buy if interest rates rise..
(Unfortunately, you likely will not qualify for the $8,000.00 tax credit as Annmarie pointed out below, as if you are currently on tile to the property you own you would not be considered a first time home buyer.)
Hope this helps & at least gives you something to think about when making a decision. Best of luck to you! Please feel free to contact me anytime if you have any questions - my contact info is below.
Have a good day!
Coldwell Banker Residential Brokerage
15490 Ventura Blvd.
Sherman Oaks, CA 91403
What you really need to look at are the numbers of your individual situation and what your objectives . You will have a good amount of equity when you sell your house and when you are buying a less expensive house you will be lowering your debt service by having a 30% down payment. Loans are also at a all time low so that will give you an advantage and let's not forget that the home you are purchasing today is also going to pop up as the market recovers which makes your investment worth more.
This is a great time to make a move if your move is well thaought out and you have a good understanding of the elements involved and your objetives.
Let me know if I can help.
Now is a great time to buy. With the government giving the $8,000.00 towards closing there has never been a better time to buy than now. The $8,000.00 will only be available throughout this year, then it is over. I hope this was helpful.