Adventures in House Hunting, Buying a House, Selling a Home

Super Bowl is over, time to get selling or buying, or both

So now that the Super Bowl is over, people’s thoughts have returned to the spring realty market. Specifically, is this a good time to sell? Most everyone agrees that it is still a good time to buy. So the only remaining question is, is it a good time to buy and sell?

At brunch the other day a friend said she thought she could sell her place for break even but Cannot bring herself to do it because she paid “all that money for it.” I said “that’s because you’re thinking of it like Microsoft stock — you bought at $50/share and now it’s $25/share and you just know it can go back up to $50 a share”.

She completely agreed with my assessment yet she is also going to continue to be a reluctant landlord. She and her spouse they were discussing keeping the condo into retirement.

If this were last year, I’d say sell as soon as you are at a point where you won’t bring money to the table, even if you don’t get a dime back. However now that the market is starting to improve, it  might be prudent to hold on to your property assuming you have a stable renter that doesn’t have the drama llama as a pet.

It’s really an algebra problem:

Let X be your mortgage, which principal decreases by $4K/year. Let Y be you Property Value which rises by 3% per year. At what point are you:

  1. no longer underwater?
  2. Able to sell and get some cash back after transaction costs (note: not necessarily profit)
  3. Able to sell for more than you bought?

My wife and I think that by the time we even reach #1 with her South Loop condo, we will be so close to paying it off that it would be fine to keep it as an in-town or a dorm room for our future kids could live if we are lucky enough to afford UIC tuition when they are college age.

My SB prediction was sort of correct. I did pick the Ravens and technically we had overtime in The form of a 30+ minute delay though Ray Lewis was mostly ineffective.  So you should completely follow my advice for the rest of your life, which should last about a Weekend before something I recommend kills you.



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Adventures in House Hunting, Buying a House, Realtors, Selling a Home

Super Bowl brings start of Real Estate Season

In a couple of weeks a long awaited event returns. No I”m not talking about the Super Bowl. I’m talking about the beginning of the Official Spring Real Estate market.

Most realtors will tell you that any time is a good time to let them sell your house. However, if you were to put your house on the market today, by the time the people looking to buy a home (aka the elusive mythical Buyer that had been feared extinct for the last few years) start their house searches, your place will have been on the market for a while, getting that kinda stale scent to it.

Then your realtor will say something like “well your house has been sitting on the market for a month now, I think you need to lower your asking price.” She will of course conveniently forget that she was the one who urged you to get it on the market as quickly as possible.

While realtors will try to convince you that any time is a good time to put your house on the market, the true season begins the day after the Super Bowl. Why do people start looking for houses the day after the Super Bowl? No one is really sure exactly why. Perhaps because without football on Sundays, wives have a better chance of dragging their husbands to open houses (or vice versa). Maybe it’s too cold to work on outdoor projects and honey-do items but not too cold to check out the latest listing in person.

I really think that what happened was someone needed a deadline to get their house ready and an agent said “get it listed by Super Bowl Weekend” and it stuck.

We have a decision to make. We could put our condo on the market while we look for a house, with the hope that we sell our condo first, and thus would have a little more buying power. This would require putting half our stuff in storage so that the place can be properly staged.

We could also take it a step further and move into our Sister-in-Law’s house and start renting our condo. The reason for this is because lenders want two years of rental income on your taxes before they credit you that for mortgage loan purposes. I don’t think it will take 2 more years to find a house, but considering how long we’ve been looking, it would maximize our options.

By the way, my Superbowl prediction: Harbough brothers duke it out ala Baltimore vs San Francisco with our first overtime Superbowl ever. It is won with a defensive touchdown by none other than Ray Lewis.


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