I'll save my hardcore thinking until the agent and I meet again, but it looks like I'll have a few options to consider:
1. Stay put and give the market a bit more time to recover. It's not like I hate my house or can't afford it* or need to move for some reason.
2. Consider renting the condo out. I can't rent it for what I'm paying for my mortgage. And if I don't use a property management company and I act as the landlord myself, I'll have to deal with the hassles of owning without the benefits of actually living there. That said, I think I could get enough in rent that I'd still save money if I paid half my friend's mortgage and also paid the difference between the rent and my mortgage. And if I did go with a property management company, I'd avoid the hassle of being a landlord. But I'd save less money. Ugh. Complicated.
3. Sell at a loss. John and I contributed some money to the downpayment and my dad also helped us out. To be honest, I don't care if I lose my share. I really don't. I don't have that money in my hand right now, and if I don't get it back it will be a theoretical bummer that does not change my reality. I have not talked to my dad about his share. That's his money, and I'll need to talk to him to see where he stands on that, but selling at a loss is an option I'm willing to at least consider, especially given how long it will likely take to wait the market out.
If I decide to sell, the realtor was of the opinion that it would be a lot easier for everyone if we weren't living there while it was on the market. An astute commenter had remarked on my last post that I could consider moving in with my friend before the house sold . . . and option that had not crossed my mind. S_ivan (the friend in question who sometimes comments here): we'll talk once I know more from my agent.
So that's the short version. Longer post on shared living spaces is brewing.
Confidential for Idol Fans: Despite the fact that I usually don't start watching until Hollywood Week, I spent last night on the couch with a bag of Doritos and a glass of wine for the entire two-hour premiere. I envision more of the same for tonight. My favorite last night was Stevie. My least favorite was Bikini Girl. That whole thing made me ILL. The blind guy totally made me cry—his story is so moving—but ultimately I don't think he has the talent to go the distance.
*Unless I lose my job, which is a real possibility, although even then it might be doable.
Posts
44 comments:
those are some tough decisions. i know you'll do what's best for you and the kiddos, so much luck to you in figuring it all out.
i'm interested in hearing your post on shared living spaces. and after the AI comment, i now want some dorritos! :)
Wow, so much to think about - Makes my brain hurt just thinking about it.
Good Luck!
Oh geez, I hate this housing market (did I mention that we're thinking of selling our house, too? How do you sell a house when it's full of twin crap???) (Sometimes quite literally...I hate potty training :)
I hope all works out for you! Hope to see you soon!
I would agree, esp with kids, if you're not in the house it would be much less stressful to keep it viewer-ready. That could work to allow you and your friend a trial period. Hypothetically, you could put the house on the market and not get any takers. By then, the two of you would know if it's a workable arrangement. If it is, I'd do the property management/rental idea and wait out the market. If it's not? Hmm...Portland?
That's a LOT to think about.
I hear you though on wanting to just purge and move on. Not dumping memories, just the placeholder. I've got that purging streak myself. Just last night, Jrex asked what he should do with my journals if he ever outlives me. "Burn them if you want. I rarely re-read them. If you want to look through, that's fine. I don't really care."
Shared living seems like a really creative solution. It will be interesting to hear more.
I was a situation that is similar (in that I wanted to sell my condo to live somewhere else in a market that was less kind to sellers than it was when I bought). After putting my place on the market for a while (and, in my case, acquiring another mortgage on the new house) I decided to rent it out.
I DID have tenant issues, but aside from that, it never occurred to me (despite the fact that I consider myself a very educated and financially responsible woman) that the government would see the rent (which didn't even cover my mortgage+condo fees) as INCOME. So, after paying through the nose on taxes because of this "income", I'm sure I didn't come out anywhere near "on top."
A year later, I sold my condo for a very small profit, but I'm sure that was canceled out by the taxes I had to pay (not to mention the wrinkles and grey hairs my tenant gave me).
It completely made my day that you called me astute!
Kate--
I speak the truth! I would have linked to you, too, but alas could not find anything to link to other than your Blogger profile. No blog of your own?
-snick
Stevie was my favorite too, and I agree about the blind guy. I also liked the blond girl with the rocker voice, but I don't think she could actually win it either. I'm SO excited that it's on again :-)
-Miss Maha (Can't log in at work)
to prepare myself for your potential arrival, i watched IA last night and agree with you on all counts. so we have that going for us.
that's AI, not IA.. sorry, i'm new to this...
Well... I guess you didn't hear anything you didn't expect... Difficult reality...
Considering that your main concern is taking care of the condo, I'd ensure that if you do move in with your friend, and a water heater breaks, it would not be your responsibility to fix it or pay for it... Just a thought...
I don't know if this would be feasible for you, or even if the payback would be worthwhile, but you could consider going FSBO. It does take time and energy that you may just not have to spare right now. We did it--with a place that we were not living in at the time--and it definitely was challenging at times. On the other hand, we were able to show the house to a better advantage than real estate agents could (this was a kind of unique property, though, that demanded some special knowledge/had special selling points; probably not as much of an issue for you), to more interested parties, and we got more interest because we could afford to be more competitive on asking price.
Well, whatever you do, I hope you find something that works well for you!
I always watch idol before hollywood week and I never know why. it's such a waste of time.
Hope you find a good solution for your housing situation.
Staging sucks. I've done it soooo many darn times. But I agree w/the comment of moving out before selling. It's so much better to not being in the house during all the showings etc. It's a pain, especially w/kids to have (at a moment's notice sometimes) to have to clean up and get out of the house. Yah, you can be there but most people feel more comfortable to really look at the place if the owners aren't there.
Good luck.
And I'm waiting til Hollywood week.
Soooo many complex issues, Snick... I don't envy you at all in having to think about and make these decisions, especially here in the Boston-area market. I hope the right answers reveal themselves to you at the right times.
I love AI, but have a hard time during this "let's show 'em all the freaks" period. I just cringe watching some of these people make total jacka$$es of themselves, you know?
Hugs,
m
Hey Snick... I'm not a real estate expert, and don't know what kind of numbers you're looking at, but someone once told me to think of real estate this way and it has helped me come to terms with declining values. (Bear with me, as I will screw this up somewhere.)
You can't look at the home's value as simply what you paid vs. what it's worth now. If you hadn't owned your condo for X years, you would have had to pay rent for that time. Figure out the amount of rent you would have paid, and you can net that out of the difference.
Using hypothetical numbers, if you paid $200K for your house, and it's now worth only $180K two years later, you haven't really "lost" $20K. If you'd paid $1K in rent per month, that would have been $24K out of pocket.
Wildly simplistic (and doesn't factor in taxes or the tax benefits of owning, or money for upkeep) but does help frame the fact you would not have lived for free during the period you owned your home.
Good luck.
I like that perspective, Anonymous - very helpful.
What's going on with your job, Snick? Anything you can share? Just curious; we're living in layoff-land right now, too.
Snick, it's funny you ask that, because I actually write on the internet for a living, but I keep my work/private lives totally separate and don't maintain I personal blog. I do twitter over here: http://twitter.com/thekate, though (protected but always accepting new followers).
Ditto Tinshee -- make sure you take the fact that rent counts as income into account (including that it can push you into a higher tax bracket so some of it may be taxed at a higher rate than you are currently). On the other hand, any money you put into maintenance etc. then becomes tax deductible, but that's nowhere near enough to make up the difference.
Also, to avoid paying capital gains taxes on the condo when you do sell it, you have to have lived in it for two of the past five years from the time that you sell it. So if you are waiting for the market to recover to sell it, and if you don't think the market will recover in three years, that is something else you have to consider.
Also consider the hassle of moving and unpacking. I moved with two young kids (not twins) earlier this year and it was absolute hell trying to manage it all. It was worth it because we moved for new jobs, but only barely!
The opinion of random internet stranger #437 is that you are almost certainly better off staying in your condo until you are ready to sell it, because it sounds like you can't afford property management and the hassles of dealing with tenants and moving on top of everything else in your life will truly make you crazy. Do you know anyone who could rent a room from you for less-than-market rent in exchange for doing all the home maintenance stuff? That could be a win-win situation as well.
FWIW, we rented out our place when we were on the opposite coast for a couple of years. It was so much easier than I had expected. We found good, responsible tenants, had a list of plumbers and electricians to call if there were any problems, and then we just visited a few times a year to take care of the odd gutter that needed cleaning, etc.
Snick, good luck with the house sale, whichever way you choose to go. The market is a disaster any way you look at it. I second anonymous' advice regarding how to look at your mortgage payments and what you saved in taxes, too.
Oh, and as for Idol...the bikini girl was h.o.t. :)
Snickollet, as random internet stranger #534, the prospect of you selling makes me nervous. You buy a capital investment at the highest possible price moment, and sell at the lowest? Unless the peace of mind you will get from getting out of there and not having all the memories in your face all the time, and avoiding the homeowner hassles is worth a LOT, it's not a good way to manage your capital. The big difference in yuor scenarios is that in some of them you are investing and developing capital, and in the others you are paying out rent you will never see again. The rent option is not good for the future unless (i) you can't afford the mortgage, or (ii) the benefits of not having those millstones (existential though they may be) outweigh the costs you are incurring by ditching this capital investment - it's not like mortgages are expensive right now....
If you do decide to move in with Friend, please protect yourselves and clarify, in writing, if you are co-housing or becoming a tenant. If you're a tenant, make up a lease, which can be super simple: "I will pay you $xxx on the yy date of each month, and you will give me zzz days's notice before throwing us out." Or go to a lawyer friend you both trust. It's short money and will save SO many hassles, like, who pays for the utilities and services, the real estate taxes, the insurances, what happens if Friend wants/needs to sell.
Yippee, I actually have something relevant to say! I just sold my condo in north NJ and I have two young children (1 & 2.5). The reason for our sale is that we are buying a bigger condo, but I didn't have a specific property in mind when I first listed my condo. Because of that, I used a multifaceted approach. I don't know if you have a friend who is good with photos/websites, but that was the first thing I set up for my condo (the site is hgcondo.com). Then I started posting the listing on craisglist and listed it on the MLS using a FSBO site called housepad. My rationale was to set the price highish, screen interested buyers so I only showed at times that worked for me, and only move if I got the # I wanted. In the meantime I started looking at 3BR listings with the goal of finding a great home at a reasonable price. Once that happened, I signed a sale-contingent purchase contract and kicked my home sale into high gear. It has all worked out (so far) and we are scheduled to stagger the closings in early Feb. Because I listed FSBO, I was able to cut my price significantly and still make a reasonable profit b/c I saved $30k on commission.
It's very hard to sell your home while you are still living in it...especially with kids. We are in that position too and it is really hard to keep it in 'showable' condition all the time...not that we have a lot of lookers *grimace*.
I like to watch AI before Hollywood week. I can't believe that some of these people think they have a chance. Sometimes, though, it is pretty painful to watch (or listen to).
I'm so glad you've realized that it's time to move closer to your family. Best thing for the kids and you. I hope it all goes smoothly.
I do think it would suck to buy at the height of the market (I also closed on my house in July 2005) and sell at the bottom BUT . . . a house is more than a capital investment. It is a home. You live in it. It makes sense to think about more than just dollars. If it is not the place you want as your home any more, and the loss you would take is not huge, and you would save money by living with your friend, and be happier, too, then I would definitely consider it.
In this economy, who knows how long it will take for your condo to recoup its original value. It could take years. And in the meantime, the value could decrease even more, and if you found that you couldn't afford it for some reason at some point, and HAD to sell, you might get even less for it.
So if you think of the rent you would have paid had you not owned, and the money you will save by living with your friend, and factor in the peace of mind etc. you might feel by not living there, it might make sense to sell.
Jeannie
Just a quick little note - we sold our place when our kids were 1.5 and 3 and we were still living in it. The way it worked is that we just put tons of kid stuff (and adult stuff) in storage - if there is less stuff, there is less stuff to get messy. It's amazing to see that kids can survive with 1/10th the crap that they normally have, and it's amazing to see how much easier it is to stay clean when there is less stuff. I remember putting cookbooks, kitchen stuff, other stuff away that I thought I could *never* live without - and then when it came time to unpack it when we had moved six months later, I didn't even care about it anymore. I am not for sure advocating that you sell, but just suggesting that if you try to do it, it might be easier than you think (though still a pain) to be living there when you show it.
Good luck, Snick!
I know this is off the topic, but I'd love to hear how the reunion with the twins went. Were they excited to be home, or did they have trouble adjusting? Did you end up loving the free time, or was it so lonely that you didn't enjoy it? Are you refreshed and rejuvenated?
Hi Snick,
First, I love reading your blog. You're so real and honest with everything you've got going on. I hope you know you have a lot of people rooting for you!
I've been thinking about these last couple of posts for a couple of days now. I have to wonder if you'll truly be happy sharing space with someone as a room mate situation? The idea of the 3 kids sharing a room that's both a play area and a sleep area sounds very cramped. Keep in mind, as they get bigger the space will get smaller. I wonder how long that could last comfortably. Where would your out of town family stay when they visit? It seems like they visit frequently.
I can totally understand wanting to move especially to get away from the hassles of ownership but can't help but tink this new arrangement will just create a new set of stressors. Also, if you're really set getting out of your condo maybe now's the time to make the move back to Oregon? The pull toward it is getting stronger, you can feel it in your posts.
Ah well, enough with my unsolicited opinion. All the best to you! I hope you come up with a solution that brings you everything you're looking for.
Our house has been on the market since June. Prices in the area have dropped enough where it no longer makes sense to sell it so we're probably going to pull it off the market, refinance, and try again in a couple of years.
ONe thing you should do if you haven't already is speak to at least 2 more agents. They all have their own target market. Their's might be different from what your current agent envisions
Good luck with your decisions! I suppose now isn't the greatest time to sell with the markets the way they are!
Take care
Is there any chance you could do a trial live together before you fully commit and move in with your friend?
I have had tenants and would never rent out again. They destroyed my house and I had to hire a lawyer to evict them. When I finally did sell the house I lost money, including my down payment and repair costs. I had to borrow money to pay off the mortgage. I also would try a trial period of living with my friend before selling the condo. It is hard living with anyone and tougher when children are involved. See how it works for a couple of months before making a final decision - JMHO.
I do not envy you and will send good energy your way.
Well, it's going to be difficult to sell at any kind of reasonable price right now. As Thalia says, this is likely the very bottom of the market.
And unfortunately, despite the hassle I really don't agree that it's better for you to move out before the sale. Buying a house with vacant possession is usually a clear indicator of foreclosure, divorce or some other kind of clear distress sale. You'll get offers more easily on this basis, maybe, but it will slash the price you can achieve. Putting you well below the bottom of the market.
The person who moving out does work for is the realtor. Because it means that mentally you are out of there. It's much harder for you to back out, and realistically once you're out of there it incentivises you to accept a lower price.
And as for the realtors -- they're bleeding to death right now but after all their arrogance and hubris of so many years before now, I shed no tears for these guys. Honestly said, they really don't care what price you get. They just want to get a sale, at any price.
And looking cynically, I'm afraid that's exactly why they want you out of there. Because once you've moved out, your attachment to the place and any kind of indecision about accepting a lower price goes out the window.
Sorry, but I think the realtor doesn't have your financial best interests foremost in their minds just now. And frankly, they really never do.
Snick- Doesn't this whole depressing property value thing make you wonder how all those people on the "What is My House Worth" HGTV show are coming out ahead? I have seen 1 or 2 houses worth less than the couple paid, all the others are showing pretty healthy appreciation. Where on Earth are they finding these people???!!!
Roads makes some excellent observations, Snick... the only thing I disagree with is that I don't think we've yet hit the bottom of the market in the Boston area. I think anyone waiting for price corrections is going to be waiting a long time, unfortunately. But others will say this correction is long overdue. Someone (buyers or sellers) always seems to be on the losing side.
So many Melissas and Mels on this blog... I'm signing with a new name to distinguish me. ;-)
Hugs,
m
You've probably already thought of this, but should you decide to stay, would refinancing your mortgage be an option? Interest rates are so low right now you might be able to cut your payment or increase equity faster, or both.
Good luck with whatever you decide to do!
Shelley
I need a story about Maddie and Riley. A funny phone conversation or something. Seems like they've been gone forever!!
I think I live in your town (saw the CNN article) - and am about to put my own single family on the market (blending families with my significant other). I have been following the market constantly for years and think that A-town is still fairly strong. Starter single families are still selling for close to or over asking price - some with multiple offers - often in a week or two. I say go ahead and give it a try. I'd move to the other house, and move enough out (most of the toys, some furniture if you need it, and some kitchen stuff) to make it look lived in, but neat and not cluttered. I have friends who live in A-town who sold their condo two months ago (top half of a two family) after the first open house - and they did it themselves by putting it on Craigslist. You can always try that for a few weeks before giving it to a realtor. Good luck!
SPICY MAYONNAISE
Hi all. This is off-topic, but we've been visiting Snick this weekend
Paul's Spicy Mayonnaise
Ingredients
1 egg
1 tablespoon hot sause*
Salt to taste (try 1/2 tsp)
1 cup vegetable oil (I like canola)
1/4 cup sesame oil
*Ghe Blade recommends Iguana XXX or other Habanero-based hot sauce. Adjust quantity to your taste.
Method
Place egg and hot sauce in food processor and pulse several times.
Turn on food processor and slowly pour in oil while running food processor until mayo sets up. Check seasoning (esp. hot suace) and finish
This mayo was inspired by spicy tuna sushi. The recipe called for adding hot sesame oil to mayo. I didn't have any hot sesame oil, so I used sesame oil and my favorite hot sauce. As mayonnaise is essentially egg and mustard to which you add oil, I adjusted a classic food processor mayo recipe to incorporate the sesame flavor and heat from the beginning. It's a killer recipe!
The Fairlington Blade
Hi, Snick,
I love your blog and get withdrawals when you don't post for a while. I just want to comment on the roommate situation. A year and a half ago a friend of mine moved in with me and my daughter. We were not close friends, but seemed compatible. Our daughters are three months apart although a grade apart in school. They were thrilled with the idea and my friend and I thought it would be a good way to save money AND not be such a single parent way of life. Well, we have worked it out but it's been WAY harder than I think either of us imagined. The hardest part is the difference in parenting styles. Before we lived together, we thought we were parenting pretty much alike. Far from it! I'm not comfortable with giving details on a semi-public place but feel free to email me for more if you want. The kids started out sharing a room, which lasted about nine months before I separated them as my kid wasn't getting enough sleep and really had no place to call her own anymore. That's helped some, but honestly, I truly wish we hadn't done it. We both feel kind of stuck financially now. If you could try a trial month or two, or have a definite backup plan, I'd highly recommend it. It's just hard to share a home with another grown woman with a kid, no matter how close you think you are. Good luck to you and I hope you find a solution that works. I would love to sell my house and get something smaller so I wouldn't need a roommate at this point, but the market sucks as you know.
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