Selling your home in a tough market and quickly after you bought it...

[thetreble 19]

Hey guys,

I'm in need of some advice. As many of you know, we purchased a home 7 months ago in an area where we thought we would be happy. My husband and I thought we could handle the commute to work, but it is draining us physically and mentally. My husband works some night shifts during the week and I often worry about him falling asleep at the wheel when he is driving home at 2 or 3am.

This market is a tough market as you all know. We will probably lose money, which is scary, but I'm willing to move and rent for a long while before we decide to buy our second home. We would need a year or two in a rental property to save up for the down payment for our next place which is just fine with me.

I talked to the realtor that sold our house today, because I posed the question to him if we should consider renting our house out while we move. He said that may not b e such a good idea if we have no previous experience being landlords (which we don't).

My husband and I, though, are dead set on moving. We really feel like we are suffering out here and while it is a beautiful area, being close to where we both work, where our friends are, and where we could do some fun things, seems really great to us right now.

Do any of you have any advice for me? Have any of you ever sold a home very soon after purchase? We don't have any equity in it at this point, but we both plan on keeping our jobs (even though my boss is a nut case she is going to eventually retire) and so that is one thing that is not going to change.

Thanks in advance!

Amanda

[July09Bride 1]

Hey guys,

I'm in need of some advice. As many of you know, we purchased a home 7 months ago in an area where we thought we would be happy. My husband and I thought we could handle the commute to work, but it is draining us physically and mentally. My husband works some night shifts during the week and I often worry about him falling asleep at the wheel when he is driving home at 2 or 3am.

This market is a tough market as you all know. We will probably lose money, which is scary, but I'm willing to move and rent for a long while before we decide to buy our second home. We would need a year or two in a rental property to save up for the down payment for our next place which is just fine with me.

I talked to the realtor that sold our house today, because I posed the question to him if we should consider renting our house out while we move. He said that may not b e such a good idea if we have no previous experience being landlords (which we don't).

My husband and I, though, are dead set on moving. We really feel like we are suffering out here and while it is a beautiful area, being close to where we both work, where our friends are, and where we could do some fun things, seems really great to us right now.

Do any of you have any advice for me? Have any of you ever sold a home very soon after purchase? We don't have any equity in it at this point, but we both plan on keeping our jobs (even though my boss is a nut case she is going to eventually retire) and so that is one thing that is not going to change.

Thanks in advance!

Amanda

Another option might be, to hire a company to be landlords for you. They charge a monthly or yearly fee for this service. BUT, you could offer up to rent the home for the cost of the mortgage PLUS the fee for the company to watch over the property for you (they consult with you in regards to maintenance, etc. but would collect monthly rent, take phone calls, etc. from tenants) PLUS an extra amount for you to use as a buffer to come down from your original asking/renting price.

In addition, you could let people know that the home is a rental with a purchase option... at some point.

Good luck, Amanda. This process is never easy.

[MrsCat 6]

Nothing to offer, but hope it all works out Amanda. That's tough!

[Otto 83]

Based on what you've described - and that you'll still be fairly close to the home - I would be inclined to suggest you guys lease the home and wait out the market.

Benefits:

• Keeps your credit intact
• Keeps you from losing any potential equity
• Possibly income producing (if you can lease it for more than the mortgage amount).

Downside:

• You'll probably be renting in the mean time

I wouldn't worry too much about not having experience in being a landlord - chances are you've been a tenant in the past so that experience can be applied to the other side of the fence. It's not that hard.

[trailmix 77]

Hi Amanda,

Sounds like a good idea.

I once bought a house and sold it about a year later - the market was neither good or bad really, but it did take me several months to sell it. Ended up breaking even on the purchase price, which was fine.

I have also owned a house (granted in another country) where I had a property management firm - 'look after it' - using that term very loosely.

If I were you, what I would do is attempt to rent the property out and I would do it myself. Granted you have no experience on chosing renters - however, it's not rocket science and you are a bright girl anyway - so you probably have already thought of the up and down sides to it. As long as you charge enough rent - and keep and 'profits' separate (so you are able to pay for a new water heater or whatever) then it can be a very good investment.

That would enable you to move, of course, while keeping your investment until the market is a bit firmer. Of course this all depends on your mortgage payments vs what you can rent it out for.

Anyway, just some thoughts.

[Krikit 1,164]

Yes, sorry to hear, Amanda, but totally understand where you're coming from.

The people in our area who want to sell are just putting their properties on the rental market for now, and there doesn't seem to be any lack of tenants. I'm surprised your realtor didn't mention a property manager, because most have a rentals division. If you decide to go it alone, check in with a real estate lawyer for contract assistance and advice. You can always hire a property manager if you find it gets too much.

I do like the idea of rent-to-own, which July mentioned. A lot of people would be interested in something like that if they wouldn't, ordinarily, be able to get a leg up on the property ladder.

Having said all that, I still see houses selling..... even in a depressed market like we have here. It's all about competitive pricing. You need to weigh the pros and cons of each scenario. If it's high on your priority to just ditch it and go, as opposed to getting the best available price, is it really worth hanging on and making all those payments that you wouldn't have had if you'd accepted an offer.

Good luck, and I wish you all the best.

[thetreble 19]

My only opposition to renting out be the price we would rent it for. Our mortgage is fairly high, mostly because of the taxes and condo fees. We end up paying about $2300.00/month for all three and I wonder if we could rent it out for that. Even between 3 or four students (we have a huge master, a guest bedroom and a fully finished big basement), I'm not sure if we would get that.

We may just have to cut our chances and run. Look at it as...our first real estate experience as a couple. I don't mind renting at all. Tons of places to rent in the neighborhoods where I work, where pets are accepted. I was a renter from the age of 18 until last year so, I have no problem with owning anything.

I'd love to keep this property and then sell it when the market goes back up and make money off of it. I'm just not sure if we can do that right now.

I would seek legal advice on the contracts, but I think we could manage the property ourselves, esp. since it's a condo and the property is already taken care of. We've also just spent money recently on a few big items in the house so things are pretty decent here as far as the shape they are in.

Bah, it's a really hard road isn't it? I should have stayed a renter for life. haha

[trailmix 77]

My only opposition to renting out be the price we would rent it for. Our mortgage is fairly high, mostly because of the taxes and condo fees. We end up paying about $2300.00/month for all three and I wonder if we could rent it out for that. Even between 3 or four students (we have a huge master, a guest bedroom and a fully finished big basement), I'm not sure if we would get that.

We may just have to cut our chances and run. Look at it as...our first real estate experience as a couple. I don't mind renting at all. Tons of places to rent in the neighborhoods where I work, where pets are accepted. I was a renter from the age of 18 until last year so, I have no problem with owning anything.

I'd love to keep this property and then sell it when the market goes back up and make money off of it. I'm just not sure if we can do that right now.

I would seek legal advice on the contracts, but I think we could manage the property ourselves, esp. since it's a condo and the property is already taken care of. We've also just spent money recently on a few big items in the house so things are pretty decent here as far as the shape they are in.

Bah, it's a really hard road isn't it? I should have stayed a renter for life. haha

Buying something is always tough, but I think it's a good thing you bought your property

I can see what you are saying about selling it though - while it might be lovely to rent it out (if you can cover expenses, as you mention) and wait until the market picks up - well that would be ideal - however if that doesn't appeal to you, to heck with it, why not sell it.

[missmissy 38]

I'm a realtor and just wanted to put in my two cents.....

As a realtor, most of us are trained to discourage people from renting - if you rent it and don't let me list it and sell it, I won't get paid!! Don't let that discourage you. I moved to Sweden in 2007, for one year. I rented my house then and my best friend looked after that situation until we got back last year. I have had the same tenant in the house the entire time and other than her being slow at paying the rent sometimes, it's worked out just fine.

I have placed the house on the market again and hope to have it sold sometime this summer and my tenant wants to buy it......fingers crossed that she can pull it off! The point is - being the landlord can suck sometimes.....but if you are careful and diligent, it can work.

There are people who okay credit but their scores are not high enough to qualify in today's market....they usually have really great jobs and can pay the rent you need to cover your mortgage.....they just can't qualify for a mortgage right now. These people are willing to pay for what they want. That's how I got my tenant. Her credit is okay, just not good enough for a mortgage with an interest rate she can afford. She makes great money......just a slow payer some months (commission sales).

I don't know what the market is like where you are but overall, it's starting to come back somewhat and this is the VERY BEST time to try to sell, if you are going to do it. If you cannot get it on the market immediately to take advantage of this time of year then I would recommend that you wait until the Spring to try and sell it.

I'm a Canadian Forum Lurker......I just love you guys!

[antda 13]

Hi Thetreble,

Ok....I think your situation boils down to the following two questions:

1) Do you want to sell it later, make a profit, and be happier and better off this way?

-In this case: You should rent out your home and get the profit from that now. Later on sell when the housing market is better, and get the profit from that later too.

OR

2) Do you want to sell it now, lose some money/break even, and be happier and better off this way?

-In ths case: You should sell your home and lose some money/break even from that now. Later on not worry about selling a home, regardless of housing market outcomes.

Either way, you and your husband have to determine what is best for the both of you. The important thing though, is that both of you are happy in your home and housing situation that you choose to pursue.

Likewise, my husband and I were faced with a similar situation a few months ago too. We wanted to get a new home (more so my husband), but didn't exactly know what to do with our old home. We definitely knew that we needed to move right away (especially with a new baby on the way soon). So instead of waiting to sell it later on for the housing market (lol...which is unpredictable and unreliable anyways), we decided to sell our home (at somewhat of a loss financially) now, as it wasn't worth it to live in a home that we were not happy living in for the rest of our lives. It was a nice starter-home when we bought it a few years ago soon after we got married, and it was all we could afford at the time, but it wasn't worth it either to put extra costs and repairs into it anymore, when we knew that were going to move out soon someday. Besides, we didn't want the extra responsibility of being a landlord, we didn't want to wait around for the unpredictable housing market and wasting the extra time later on in showing our home, and we needed the money from the equity and sale of this old home (no matter how much the loss) in order to get our new home and be approved mortgage-wise for that right away.

As well, it's "buyer's housing market" now...So why not buy now while it's low?.....

Needless to say, despite our somewhat financial risk, we are definitely happier in moving and selling our house now instead of later....For us, happiness is not in the making more money, but in enjoying our new home instead....

Lol...now all I have to do is wait for our new-construction house to be built, hopefully by July....(but that's another story!)...

Hope this helps. Good luck on your new home journey too.

Ant (New home=Happy......)

Hey guys,

I'm in need of some advice. As many of you know, we purchased a home 7 months ago in an area where we thought we would be happy. My husband and I thought we could handle the commute to work, but it is draining us physically and mentally. My husband works some night shifts during the week and I often worry about him falling asleep at the wheel when he is driving home at 2 or 3am.

This market is a tough market as you all know. We will probably lose money, which is scary, but I'm willing to move and rent for a long while before we decide to buy our second home. We would need a year or two in a rental property to save up for the down payment for our next place which is just fine with me.

I talked to the realtor that sold our house today, because I posed the question to him if we should consider renting our house out while we move. He said that may not b e such a good idea if we have no previous experience being landlords (which we don't).

My husband and I, though, are dead set on moving. We really feel like we are suffering out here and while it is a beautiful area, being close to where we both work, where our friends are, and where we could do some fun things, seems really great to us right now.

Do any of you have any advice for me? Have any of you ever sold a home very soon after purchase? We don't have any equity in it at this point, but we both plan on keeping our jobs (even though my boss is a nut case she is going to eventually retire) and so that is one thing that is not going to change.

Thanks in advance!

Amanda

[July09Bride 1]

I'm a realtor and just wanted to put in my two cents.....

As a realtor, most of us are trained to discourage people from renting - if you rent it and don't let me list it and sell it, I won't get paid!! Don't let that discourage you. I moved to Sweden in 2007, for one year. I rented my house then and my best friend looked after that situation until we got back last year. I have had the same tenant in the house the entire time and other than her being slow at paying the rent sometimes, it's worked out just fine.

I have placed the house on the market again and hope to have it sold sometime this summer and my tenant wants to buy it......fingers crossed that she can pull it off! The point is - being the landlord can suck sometimes.....but if you are careful and diligent, it can work.

There are people who okay credit but their scores are not high enough to qualify in today's market....they usually have really great jobs and can pay the rent you need to cover your mortgage.....they just can't qualify for a mortgage right now. These people are willing to pay for what they want. That's how I got my tenant. Her credit is okay, just not good enough for a mortgage with an interest rate she can afford. She makes great money......just a slow payer some months (commission sales).

I don't know what the market is like where you are but overall, it's starting to come back somewhat and this is the VERY BEST time to try to sell, if you are going to do it. If you cannot get it on the market immediately to take advantage of this time of year then I would recommend that you wait until the Spring to try and sell it.

I'm a Canadian Forum Lurker......I just love you guys!

We love nice lurkers! Welcome to the Canadian side of things! (Even though I'm... ummm... adopted (yeah, that's it - adopted into the Canadian forum!)... lol ... my fiance' is the Canadian (and I'm the USC)!)

BTW, great advice!

Edited June 22, 2009 by July09Bride

[Flames9_RN 358]

Thats what we plan on doing to our condo--renting it out later this year! Figure it will be a good learning experience as well. Were not moving that far away--about 45 minutes, and our brother in law owns a condo here as well, so he is only steps away, plus were close to our neighbors, so a good eye will be kept out for it.

We have done a bit of research and have a good idea on what it can be rented out for. As well some say to put a ad on Craigslist and see how many bites ya get. Of course one has to be careful with CL!!

We were told by 1 bank, that if your looking to buy a house while renting out your other home, they know what proof that it has been rented out. In the past, they were not soo picky, but thanks to the mortgage mess, they seem to be a bit more picky.

Don't think its that hard of a process to do, no matter what ya do, if ya get bad renters, it can turn into a nightmare! In-laws years ago bought a place in Newport RI just to rent out, and it got trashed! And it had a company looking out over it, so didnt much help! Didnt bother to sue, as lawyers are not cheap,lol might as well put the $$ in the house, rather to the lawyers!.

Got to do what makes a happy--well for the most part at least

[thetreble 19]

What will make us happy AND HEALTHY is to definitely move. My husband just got transfered to another restaurants that stays open even later (2am on weekends) and I can't imagine him driving home at 4am after a 12 to 14 hour day and not falling asleep at the wheel. I'm pretty nervous about it.

I don't think we could get the money in rent we pay each month.

Our decision is going to be to sell it. But now I'm worried I will owe more on the mortgage than we can sell the house for! I don't even know what happens in those situations.

[Flames9_RN 358]

Most likely hand the bank a check with the difference. Or what many have done, just dont pay and walk away! Of course ur credit is screwed and one has to have no morals,lol

[thetreble 19]

Most likely hand the bank a check with the difference. Or what many have done, just dont pay and walk away! Of course ur credit is screwed and one has to have no morals,lol

Oh, we would pay the difference if they let people do that. That wouldn't be a problem. I just wasn't sure if they let you do that.