money in hand or money wasted ?

Asked by Chris, Laguna Beach, CA Thu Sep 11, 2008

i have a situation that allows me to get 50k in hand. now i have a 5/1 mortgage w/2 yrs left and i have listed my house now for 2.5mths with .5 left on contract with my realtor and No offers. WE both new our listing price was at the top of the comps and we new this was going to be a hard sell, especially with a couple forclousers in a community. So i was thinking, after my contract expires, should i re-fi for another 5yrs at a lower rate and keep the 50k in hand and re-list maybe in a year or 2 when the market picks up or, apply the 50k, payoff my 2nd and try sooner to list. Its not that i have to sell the condo but there are soooo many good deals to upgrade into a single family home, i'm affraid that i will miss out if i hold put for too long...Dont know what to do ?

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Jeremy Lehman, Agent, Garden Grove, CA
Thu Sep 11, 2008
Hi Chris, great problem to have right now. Many would agree that the buying opportunity is a good trade off to the pain of selling. As you found out, you can't be at the top end of the price range. You are competing against banks right now, who need to liquidate their inventory. I think right now is a great time to buy because of some of the great deals combined with outstanding interest rates. It's tough to guess if the two will continue to stay in our favor. If you are going to buy, then you need to aggressively price your condo to sell, or is there a possibility you can rent it out for a few years? Either way you go might work out for you.

Jeremy Lehman
Century 21 Beachside
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Sandra Carli…, Agent, Newport Beach, CA
Wed Oct 8, 2008
You may have a hard time getting a refi because you are listed now, even if you take your home off the market, the appraiser will look into it when you get the refi. If the bank allows the refi knowing that you had your property listed, you will probably be looking at a pre-payment penalty should you sell in a year or two which can be pretty hefty. (Some prepays go as long as 3 years.)

You should talk to my lender, Nate Lindsey with Bankers Funding at (714) 394-0506. He is based outside Fashion Island. Let him know you are currently listed but considered taking it off the market to refi so he can get you the correct information.

Are you priced high according to comps because of the 2nd and what you need to get out of the property? Or is it just that you are not super motivated, but have room in the price?

I think you will know what you want to do when you have the facts in front of you.

When you no longer have an agent (contract), I would love to give you the market trends for your current condo and the type of home you want to move up into. Let me know if you need anything else.
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George, , Costa Mesa, CA
Mon Sep 15, 2008
I would be careful assuming you can refinance.. if you have a first and second and a couple of foreclosures in your neighborhood, you might be stuck with what you have. If you haven't received ONE offer so far, you're just wasting your time and your agent's time by having the property listed. If you're intent on upgrading now, reduce your price to get the house sold ASAP and go rent for the next 6 months while shopping for a good single family home. Use the proceeds (if any) along with the 50k to put a nice down payment somewhere and stick to a 30 year fixed mortgage. Great time to buy but don't rush as we're nowhere near the bottom yet.
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Ellen Boswor…, Agent, Laguna Beach, CA
Fri Sep 12, 2008
Hi Chris,
I would ask a mortgage broker to run the numbers for me so that I could have it on paper to make a good decision (I have a great one if you need a contact). If you decide that you want to purchase a home now and sell the condo you will really have to sell at a good price to get the offers you are looking for. There are some good prices on homes in the area, lower than I have seen for years. You will generally make more money over the long haul with a home than you will in owning a condo and at some point you want to please yourself with a particular lifestyle, if you can afford it.
Best Wishes, and I would love to help if I can.
0 votes
Cynthia Flem…, Agent, Laguna Niguel, CA
Thu Sep 11, 2008
Personally I believe you will get more for your money now because of the current market. That has always been the benefit of buying in a down market. Also, the interest rates have been coming down lately and who knows how long that will last. I wish I had a crystal ball! Many forecasters believe interest rates will be going up in the not too distant future. With home prices being lower and interest rates lower, you tend to gain significantly with your purchase power. On the other hand, you will have to be realistic with the price of your home in order to sell it quickly. Currently we have 17.5 months supply of inventory in Laguna Beach. I can break that down by price range if you're interested. Email me at:
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Barry Lynn M…, , Trussville, AL
Thu Sep 11, 2008
You must understand that if you take your hit on the selling side you will get it back when you buy the SFR.
In a perfect world you would sale your house on the upswing and buy on the down but this isn't the stock market you still have to live some where. The best thing to do is look at the whole picture if you are able to sale lets say at 15k lower than you want but you can buy at 25K under what the seller of the SFR wants than you have come out ahead.

Other Option

Refi and take advantage of the lower rates and then rent your condo out until the market changes in your favor - and buy while the market is down
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