Should I Sell My House?

8 posts / 0 new
Last post
etsan's picture
etsan
Status: Bronze Member (Offline)
Joined: Apr 22 2009
Posts: 57
Should I Sell My House?

Hello,

I was wondering if I can get some opinions on whether I should sell my house. I bought mines for $585K when the market was at its high. I'm able to make the payments without a problem. My current balance is $340K. I'm also having a baby on the way. But with the foreclosure rates going higher and my house slowly losing value, I'm not sure if I should sell my house or not. What do you guys think? I read that Chris M. sold his house before almost paying it all off. Why would he do something like that? Thanks for your input.

Sincerely,

Erick

Juvysen's picture
Juvysen
Status: Martenson Brigade Member (Offline)
Joined: Sep 30 2008
Posts: 121
Re: Should I Sell My House?

I'm in a similar position, although I am in an area that was not affected by the bubble.  I'm torn between the feeling that owning this  place flat out (paying it off as fast as we can - we could be done in about 5 years) would at least mean we have land on which to grow food and a place of shelter, but if we can't own it flat out soon enough, perhaps we should move to a smaller place (maybe that has more land?) that we could be done with paying within the year?  I dunno, I keep going back and forth.

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2237
Re: Should I Sell My House?

Chris sold his house before the bubble collapsed because he perceived that the market was as high as it was going to get.  Why sit tight and keep a house that's only going to lose value.

For the rest of us, who still own houses and are watching their value decline (although I guess Jenna/husband were unaffected), it's a different matter.

Something to consider:  if we are about to enter a period of serious (double-digit or more) inflation, then we'd be making mortgage payments with dollars that are worth less than now.  Assuming your income will shift upward w/inflation, it'll get easier to make the payments.  

But those 'ifs' aren't necessarily sure things (although I believe them to be likely).  YMMV.

And yes, Jenna, I think owning land where one can grow food will be very very important.

Viva -- Sager

jerrydon10's picture
jerrydon10
Status: Gold Member (Offline)
Joined: Mar 2 2009
Posts: 442
Re: Should I Sell My House?

Erick, have you probed around to find out approximately what your house might sell for? To me, that would be the first thing I would want to know before making a major decision like that.

Gungnir's picture
Gungnir
Status: Platinum Member (Offline)
Joined: Mar 2 2009
Posts: 643
Re: Should I Sell My House?

Jenna, here are my thoughts.

Average agricultural land per person globally is 0.75 acres, however in the US this is 2.17 acres, if you want to sustain your current food habits you'd need 2.17 acres per person in your household if you're growing your own food supplies.

However if you're prepared to cut back a bit you can get by on about an acre per person, with good crop selection. If your current home is not on that much land, then I'd recommend selling so you can get enough land to comfortably feed your household.

You can increase productivity using hydroponics or aeroponics, however these tend to need higher grade fertilizers (made from petrochemicals) more water, and energy, all of which might be at risk.

Hope this information helps with your decision.

PlicketyCat's picture
PlicketyCat
Status: Platinum Member (Offline)
Joined: Feb 26 2009
Posts: 680
Re: Should I Sell My House?

I think getting your property appraised, then taking 10-20% of that appraisal for market decline and dickering, would be a good place to start when determining whether to sell or stay. Private appraisals cost around $500, which is a small price to pay for such valuable information. Having a trustworthy Realtor assess your property is also a good idea, since they know what the market is doing and whether your house is likely to sell in a given time period. 

If the offset appraisal is significantly lower than the mortgage balance, you're looking at a situation where you would continue to be paying more for the house than it is worth (or will ever likely to be again). In this case, it's a personal financial decision whether you want to accept being a slave to your house, or whether you want to sell short and possibly face credit impacts and/or collections.

If the offset appraisal is at or above the mortgage balance, you might be able to sell your home in the black... but you might not make any profit on the sale after fees are paid. Or you could stay in it, knowing your house is worth what you're paying and betting that you'll still have income and your dollars will still be worth enough.

Other than finances, some things to consider when deciding to keep or sell your home:

  1. Do you like the house, neighborhood, town, etc? (if the place isn't great, why stay?)
  2. Is the house the right size for your needs? (if it's too big, downsizing would be a good idea)
  3. Is the house energy efficient and easy to heat and cool? (if it's an energy hog, fix it up or move)
  4. Do you have the legal ability to install alternative energy systems, procure your own water, raise livestock, grow food? (you have to watch those home owners associations and town regulations!)
  5. Do you have enough land to support yourself & family reasonably well & is the available land appropriate for your purposes? (large acreage of crappy soil with bad growing conditions won't support a family, neither will only 1/4 acre with the most perfect conditions)
  6. Are you in a high risk area & can you defend your home if things get really bad?
jpitre's picture
jpitre
Status: Gold Member (Offline)
Joined: Mar 3 2009
Posts: 366
Re: Should I Sell My House?

 Some thoughts ............

I think that to sell or not to sell has more to do with what you really want to do more than anything else. As an investment, it seems to me that the risk of value going down is far greater than the likelihood  of the value increasing in the foreseeable future. So much depends on the home, its location and suitability in hard times. After a careful study of the Crash Course, does the home you have lead you down the path best suited for your needs. We all have our own ideas, but I think Chris' concept of a small community with like minded people that as a group has the ability to provide the needed food, shelter and security for its local population makes sense. A few acres with at least the potential to raise enough food for one's family with no debt along with some solar panels, wood for heat and a good water source seems to me like the best place to be.

The idea of being in a subdivision in or near a large population center exposes one to extreme dependency on government, local services, police etc, all of which could disappear in a few days or weeks. What happens when the local food stores are empty? Give me a few chickens, a good garden and a root cellar any day for what appears to be coming. Of course, if that means giving up a good job, the decision becomes more difficult and complex. In the final analysis, we all must trust our own judgement.

 

Jim

etsan's picture
etsan
Status: Bronze Member (Offline)
Joined: Apr 22 2009
Posts: 57
Re: Should I Sell My House?

Thanks for the replies. I live in a city close to Los Angeles. Its a pretty good neighborhood with a good location next to a park and great elementary school, close to freeways and shopping. I honestly believe I can sell it for at least $550K. But like many cities in southern California, there is zero land that you can really grow any crops. As convincing as Chris M. CC said, I'm still having a hard time thinking something like this can happen in the near future (TSHTF). Although I'm the type that does not believe that our govt and the monetary system is viable.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments