we bought a new home april 2006 for 800,000 the same house is sold for 650,000 by the builder.

Asked by Ginin, 92078 Thu Jun 18, 2009

the house value is 650,000 but we purchased at 800,000 and put 160,000 down payment in 2006. please give your opinion. we don't want to stay in this house and we can't refi because of the fallen value to 650,000 if we short sale then we lose 160,000 down payment. we are afraid to rent because renters damage the property most of the time. we keep paying mortgage and taxes. please help......

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Michael Ford, Agent,
Tue Aug 2, 2011
hey all, this question is over 2 years old...

Ginin, can we get an update on your state of ownership?

we would all like to hear of your decision...or indecision. getting followup responses from posters helps us to see the whole picture and your experiences can be most helpful to others in you your position.
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Aug 2, 2011
It feels like a thief came into the house, while you were away, and stole $150,000 from you.
You no longer love the house; it feels violated.

Is that pretty much it?

I would ask you to change how you're looking at it:
It is the same house it was.
You are the same person, and your family is the same.
Either the house meets your needs, or it doesn't. It is just a tool, something to use while you're here.
Your bank account hasn't changed.
Your Net worth actually hasn't changed either.
Your monthly payment for housing is the same.

If you can handle the monthly payment; visualize where you will be 3,4,5 years from now.
Now visualize where you will be if you accept a Shortsale or a Foreclosure.
Which is worse?

Good luck and may God bless
0 votes
Randy Callow…, Agent, Escondido, CA
Tue Aug 2, 2011
I would also check what your home is valued with the County tax assesor. You might be able to save some money on your property taxes by getting this lowered to the correct market value. I am not sure of your financial situation, but you might check with the HOPE for homeowners website and see if you qualify for a Loan modification, or contact your lender direct. Good Luck.
0 votes
Michael Ford, Agent,
Sun Mar 20, 2011
you've already lost the $160...that ship sailed. regrettably, the likelihood of the value returning is near zero.

most $650k homes do not rent for nearly enough to make good rentals, so the cash flow on it will be dreadful bad. but...if you convert it to a rental you have a whole raft of tax benefits such as depreciation, interest deductions and such which MIGHT make the loss a bit less bitter. you need to get with a tax advisor and see if the loss of value can be a capital loss when you sell. it is NOT a deductible loss on a personal residence but you may be able to re-characterize the property to gain that benefit. this mis probably not something that an HR block type can help with. get a real CPA>
0 votes
Bonnie Malon…, Agent, San Diego, CA
Sat Jun 27, 2009
I certainly understand your situation and there is no easy answer but consider if you can still afford to stay in your home. If you can still afford the mortgage payments then stay where you are and enjoy your home. If you have to move, I would suggest consider renting and yes, renters will never take care of your home as you will but if you are careful and choosey you will find a good renter as they are out there and you will then be able to afford your home and move on with your life. Also your new rental property will offer you many tax benefits. Talk to your tax avisor and find out. good luck.
Web Reference:  http://www.BonnieMaloney.com
0 votes
Mission Viejo…, , Mission Viejo, CA
Thu Jun 18, 2009
It is either you stay in the house and ride out the price, sell it short and lose $160,000, walk away and lose the same money, rent it out or talk to the bank some more and try a refi. That is all the options you have! I know this hurts and that you aren't alone. If there is anyway to stay that is the best answer.
0 votes
Matthew Bart…, Agent, Glendora, CA
Thu Jun 18, 2009
Hi Ginin,

You are correct in that if you short sell you will lose the $160k down payment. In addition you will reck your credit by selling the home short. Renting is an option but there are risks involved, just like with any business. Thou, the risks are not so high that you should disqualify the renting option. However, how long did you plan on living in this home when you first purchased? If your plans were really long term 8 years or more, than you should consider staying where you are and riding out the market. Values will return. While I cannot tell you when the market will completely recover I do know that the market historically is cyclical and always rebounds. When the market recovers enough the refinace option will return as well. If I may be of further assistance please feel free to contact me in my office at (626)610-1179. Thank you!

Matt
0 votes
Diane Teti, Agent, San Diego, CA
Thu Jun 18, 2009
Good Morning, a good option might be to talk with your bank about a loan modification. Some banks will require you to be at least one month behind, that needs to be a serious decision on your part, on the other hand some banks will look at the circumstances and decide to do a modification before you come deliquient. What is your reason for needing to move? You can visit our custom webite at http://www.SanDiegoPropertyValues.Info , there you can get a very good idea of what your actual home value is compared to homes right around you immediate neighborhood. Renting can be an option, however, it would appear that you would have a large negative between rent and mgt and taxes. We can talk about the option that short sale will offer.
0 votes
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