To sell or not to sell

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sweetbeee's picture
sweetbeee
Status: Member (Offline)
Joined: Oct 5 2008
Posts: 1
To sell or not to sell

My Mother past away a year ago, I have a 1/5th interest in her home, If sold currently at its appraised value I would stand to make $155K.  My siblings do not want to sell as they feel it's not the right time and if they wait they will make more money.  I feel that the RE market is re-adjusting after the bubble and today's prices are the new norm.  Here in Louisiana, we would have had RE prices fall except right when they were poised to do so, Hurricanes Katrina and Rita hit, creating a housing shortage overall in the state. 

I believe things will become worse and the house will lose value yet if hyper-inflation sets in and I have cashed out on the house, I will lose value there as well.

I ask all of you, should I push to be bought out now or should I leave things alone.  Is it better to have cash now (in case of deflation) or assets (in case of inflation).   Please advise me as to what I should do.  I thank all of you for all of your insight.

BBG

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: To sell or not to sell

Hi sweetbeee

Welcome!

I don't know if I'm the person to be giving advice on this but here are my thoughts.

Do you have an emotional attachment to the house? Meaning is it a childhood home? If so that could be a consideration.

Is anyone living in the house? If not that could be an issue in regards to upkeep or vandalism.

It sounds as though the house is in an upper income bracket in price. That maybe a hard sell nowadays but if there isn't much competition in that location it maybe doable. Have you spoken to a real estate agent? What were their thoughts?

I believe things will become worse and the house will lose value yet if hyper-inflation sets in and I have cashed out on the house, I will lose value there as well.

Yep. However, seeing how it is an inheritance you won't really be losing any 'money'.

I would ask myself questions about both sides of the spectrum. 1) Whats the least you would take for the house? Can you get that price? 2) If you can't or won't sell what are your options? Can you live in the house rent free to keep an eye on it? How do the other parties feel?

Is there land around the property to grow food, fish or hunt? Any oportunity to create a steady income from the property? That might allow you to wait things out.

Oh well. I think I asked more questions than provided answers Smile

 

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3200
Re: To sell or not to sell

JO

Quote:

Oh well. I think I asked more questions than provided answers Smile

There's good reason for that.  We don't know much about the property.

These kinds of questions are highly individualistic.  As you point out, sustainability is an important issue.  Is the value of the property based on acreage, house or location, location, location?  Is actually living there a realistic option for any or all of the heirs?

It sounds like the other heirs expect this period of low RE values to end and things to go back to "normal" at some point in the relatively near future.  My personal opinion is that this is not the "new normal".  I expect that we haven't yet reached the new normal until we are a lower price level.

If the property is largely a very nice house, my guess is that it will be more of a burden going forward.  If, otoh, its a farm with good agricultural land and independent water, it can be a huge asset.

In the final analysis, there are way too many variables to make any judgment on what we know.

Doug

Tycer's picture
Tycer
Status: Platinum Member (Offline)
Joined: Apr 26 2009
Posts: 617
Re: To sell or not to sell

The Alt-A and Option ARMs have yet to run through their resets. 

An Option ARM with a 5% rate written in late 2007 (when WAMU quit writing them) will reset late 2012. A $400K loan under that scheme would have a $1450 payment until it reset to $2790

Here's a chart of the volume of loans out there. http://news.goldseek.com/GoldSeek/1236605940.php

I believe the resets will cause a massive set of foreclosures in 2011-2012 and hit the market 2012-2014 hard.

With the DOW around 12k and consumer and market sentiment sort of soaring right now, I think this is the perfect time to sell.

Remember though, the income from that house is a bonus and if you can't convince your family to sell, the loss of income is not worth the loss of family.

ljhaines's picture
ljhaines
Status: Bronze Member (Offline)
Joined: Apr 23 2009
Posts: 35
Re: To sell or not to sell

If you live in Louisiana, you need to sell while you can. The oil and gas business in the gulf has not been getting permits to drill. Last week there was only one rig in the entire gulf drilling for oil. You can't run an industry that way nor can you run a country that way for long. Especially if the middle east boils over.

The seafood industry still hasn't come back from previous levels and BP only has about 10 clean up boats out now down from approx. 100.Things are slowing down on the coast. If another storm hits this summer, that will be bad for the area.

Take the money, plan accordingly. If you are in the New Orleans area, email me and we can get together for a cup of Java.

 

ewilkerson's picture
ewilkerson
Status: Gold Member (Offline)
Joined: Jul 18 2010
Posts: 390
Re: To sell or not to sell

If you can sell the house, you really should.  We did have an uptick in new home sales recently, but the market is still going to decline more.  There are still bad loans that are readjusting now.  We have no idea, actually, when people will understand Peak Oil, whether we have a bad Treasury auction, or weather the unrest in the Mid East spreads to someone like the Saudis.  Any of these could crash the market.  Better to get your money while you can, if you can, and put it to a better use.

sevenmmm's picture
sevenmmm
Status: Silver Member (Offline)
Joined: Jan 19 2011
Posts: 108
Re: To sell or not to sell

If it is just a big house with a grass yard, in my opinion, it isn't worth the money you are typing bout. If it is a working property, I would have to know more to form an opinion. Otherwise, the real question to ask yourself is: "What will I do with the money"? If you are going to blow it (I am not thinking you will, just making a statement) on new cars, trips to Las Vegas, and weekly cruises - then don't take the money!

dogdue's picture
dogdue
Status: Member (Offline)
Joined: Feb 8 2011
Posts: 4
Re: To sell or not to sell

Consider having the other 4 family members buy you out if they want to keep the house....

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