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Would you sell short to buy a nicer house at a better value?

Home ▸ Archive ▸ Serious Business ▸ Would you sell short to buy a nicer house at a better value?
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:08 AM
Well needless to say when I bought my house, the market was better than it is now. I have it for sale and my realtor said I'd probably only make a little money or break even. My fiancee and I have an offer on a house contingent upon selling mine. I got an offer lastnight lower than what I owe. It's only been on for a couple weeks. Do I accept it, eat the loss, and purchase the new house... or do I decline and risk losing the house we want in the mean time to another buyer. It's not a great offer.. I'd think I could get a better one..but I guess I'm not sure of that either.. My realtor said the houses in my alotment typically are taking 85 days and if I can afford the loss to take the offer.

I guess I'd just hate to take the offer when another one might not be far behind. It's had a lot of showings in the couple weeks.

If I sell short I'll have to show up with about 12 grand to close and thats not counting closing on the purchased house.
Feb 1, 2012 11:08am
OneBuckeye's avatar

OneBuckeye

Senior Member

5,888 posts
Feb 1, 2012 11:15 AM
If you are that early in the process I would counter offer and wait it out. I wouldn't worry about finding other houses you like if you lose out on the one you want now.
Feb 1, 2012 11:15am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:21 AM
No way. I didn't buy my house based on what others might think it's worth in the future. I certainly wouldn't sell it because others thought is was worth less than what I paid for it.

It really comes down to the total deal for you I guess.

Is there additional value, $12,000 or more, in getting the other house you are looking at. Do you want the other house even if it costs $12,000 more than the agreed upon price. It doesnt really matter what we think.
Feb 1, 2012 11:21am
S

Steel Valley Football

Senior Member

4,548 posts
Feb 1, 2012 11:25 AM
Oh my god stfu w that already will you please. Who the f cares how special you are CA.
Feb 1, 2012 11:25am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:25 AM
Con_Alma;1072068 wrote:No way. I didn't buy my house based on what others might think it's worth in the future. I certainly wouldn't sell it because others thought is was worth less than what I paid for it.

It really comes down to the total deal for you I guess.

Is there additional value, $12,000 or more, in getting the other house you are looking at. Do you want the other house even if it costs $12,000 more than the agreed upon price. It doesnt really matter what we think.
Well the 12,000 includes realtors commission and all that jazz. Not all that is being made up on the loan so you'll have to pay it no matter what.
Feb 1, 2012 11:25am
FatHobbit's avatar

FatHobbit

Senior Member

8,651 posts
Feb 1, 2012 11:27 AM
Con_Alma;1072068 wrote:Do you want the other house even if it costs $12,000 more than the agreed upon price.
This is what it comes down to IMO. You are basically paying an extra $12,000 more to get the house you want. Is it worth that?
Feb 1, 2012 11:27am
sleeper's avatar

sleeper

Legend

27,879 posts
Feb 1, 2012 11:29 AM
Steel Valley Football;1072071 wrote:Oh my god stfu w that already will you please. Who the f cares how special you are CA.
This is an immature and rude response to one of our most respected forum users.

The correct response should have been:

/Con_Alma'd
Feb 1, 2012 11:29am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:31 AM
OneBuckeye;1072063 wrote:If you are that early in the process I would counter offer and wait it out. I wouldn't worry about finding other houses you like if you lose out on the one you want now.
That's what I was kinda thinking too. The house we offered on has been on the market for +200 days. Not to say it couldn't sell from under us.. but the odds that it would aren't that great.
Feb 1, 2012 11:31am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:32 AM
ZWICK 4 PREZ;1072072 wrote:Well the 12,000 includes realtors commission and all that jazz. Not all that is being made up on the loan so you'll have to pay it no matter what.
I guess I dont follow you. If you have to pay it no matter what then what's the question. If you'll be out of pocket the cash then sell and buy the house you want.
Feb 1, 2012 11:32am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:33 AM
FatHobbit;1072076 wrote:This is what it comes down to IMO. You are basically paying an extra $12,000 more to get the house you want. Is it worth that?
Yep. I agree with this. Is the new house worth $12,000+ more than the transaction price. That's the only question that matters.
Feb 1, 2012 11:33am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:34 AM
Steel Valley Football;1072071 wrote:Oh my god stfu w that already will you please. Who the f cares how special you are CA.
Not only do I not think anyone cares but I also don't think there's anything "special" about my response to the question.
Feb 1, 2012 11:34am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:35 AM
Con_Alma;1072092 wrote:I guess I dont follow you. If you have to pay it no matter what then what's the question. If you'll be out of pocket the cash then sell and buy the house you want.
I mean a certain amount of that money is earmarked for closing.. I wouldn't be 12,000 short on the loan. Whether I'm short on the loan or make a profit on the sale, I'm paying closing costs.
Feb 1, 2012 11:35am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:37 AM
ZWICK 4 PREZ;1072095 wrote:I mean a certain amount of that money is earmarked for closing.. I wouldn't be 12,000 short on the loan. Whether I'm short on the loan or make a profit on the sale, I'm paying closing costs.
I get that. I don't even put the loan into the equation.

It's the total deal you have to consider a opposed to each house individually.

Do you want the new house at a price of the transaction amount plus $12,000+? If not, don't sell at the offer you've received.
Feb 1, 2012 11:37am
S

Steel Valley Football

Senior Member

4,548 posts
Feb 1, 2012 11:41 AM
Con_Alma;1072093 wrote:Yep. I agree with this. Is the new house worth $12,000+ more than the transaction price. That's the only question that matters.

That's not the only question that matters. Obviously, he wants the most utility for his dollar, but the question he's asking, or appears to be asking, is whether he should capitalize on the low market price of a more expensive property. All else being equal, should he takes a loss on one property to gain bigger savings on another property.
Feb 1, 2012 11:41am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:43 AM
Con_Alma;1072102 wrote:I get that. I don't even put the loan into the equation.

It's the total deal you have to consider a opposed to each house individually.

Do you want the new house at a price of the transaction amount plus $12,000+? If not, don't sell at the offer you've received.


I get what you're saying to but what I'm saying is obviously I've decided the house is worth purchasing plus X for whatever closing costs are.
What I'm wondering in other perspectives is that if it's worth X + Y being whatever I'm short on the loan, when Y could be diminished or even positively affect the purchase price with a different offer.
I know what you're saying is x + (-y) =/= new home purchase.
Feb 1, 2012 11:43am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 1, 2012 11:44 AM
Steel Valley Football;1072107 wrote:That's not the only question that matters. Obviously, he wants the most utility for his dollar, but the question he's asking, or appears to be asking, is whether he should capitalize on the low market price of a more expensive property. All else being equal, should he takes a loss on one property to gain bigger savings on another property.
Exactly. And I hate myself for giving you credit for a good answer.

In an ideal situation I would like to make money on the house and buy a nicer house at a lower value. That's not the option at this point. Do I decline the offer and potentially miss out on obtaining the new house, or do I bite the bullet and take the loss now and hope I make it up more so in the future.
Feb 1, 2012 11:44am
Apple's avatar

Apple

Prost!

2,620 posts
Feb 1, 2012 11:44 AM
1. Forget whatever is said on this thread and do whatever your bride wants you to do.

2. Get used to this way of thinking for the rest of your life.

3. :p :D
Feb 1, 2012 11:44am
F

Fred Flintstone

Senior Member

366 posts
Feb 1, 2012 11:45 AM
Without getting into to too much... would it be beneficial for you to take it as a capital loss on your taxes? I don't know your situation but that could play into it.

Edit: I guess this will only work if the property was an investment property. If you sell an investment property for a loss, your loss may be deductible against your income. Investment properties are treated very similar to equity investments in this regard.
Feb 1, 2012 11:45am
S

Steel Valley Football

Senior Member

4,548 posts
Feb 1, 2012 11:45 AM
Con_Alma;1072068 wrote:No way. I didn't buy my house based on what others might think it's worth in the future. I certainly wouldn't sell it because others thought is was worth less than what I paid for it.

It really comes down to the total deal for you I guess.

Is there additional value, $12,000 or more, in getting the other house you are looking at. Do you want the other house even if it costs $12,000 more than the agreed upon price. It doesnt really matter what we think.
Ok special guy.
Feb 1, 2012 11:45am
LJ's avatar

LJ

Senior Member

16,351 posts
Feb 1, 2012 11:45 AM
just keep countering till you get to a point that you feel comfortable. If they walk, then they walk.
Feb 1, 2012 11:45am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:49 AM
Steel Valley Football;1072107 wrote:That's not the only question that matters. Obviously, he wants the most utility for his dollar, but the question he's asking, or appears to be asking, is whether he should capitalize on the low market price of a more expensive property. All else being equal, should he takes a loss on one property to gain bigger savings on another property.
That's an easy answer for me. I wouldn't do so based on the home being my primary residence.

I don't add risk to my primary residence. You could be in the same situation with the new home as the last. There are variables that at best can only be predicted. How long do you plan on being in the new house?

It still comes down to, even when considering the unknown variables, is the new house's price plus $12,000+ worth the potential future unknowns? What trumps all of those is buying the house as your permanent home as opposed to an investment. Those future variables are then irrelevant.
Feb 1, 2012 11:49am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:50 AM
Steel Valley Football;1072114 wrote:Ok special guy.
Special? How so?
Feb 1, 2012 11:50am
C

Con_Alma

Senior Member

12,198 posts
Feb 1, 2012 11:55 AM
ZWICK 4 PREZ;1072109 wrote:I get what you're saying to but what I'm saying is obviously I've decided the house is worth purchasing plus X for whatever closing costs are.
What I'm wondering in other perspectives is that if it's worth X + Y being whatever I'm short on the loan, when Y could be diminished or even positively affect the purchase price with a different offer.
I know what you're saying is x + (-y) =/= new home purchase.
Sounds like you should do it.

Sounds as if the only hesitation you have is based on if a greater offer will come yet you've already determined that the new purchase is worth the total costs.

You have in hand a deal that you have determined is worthwhile yet are are contemplating waiting for an unknown.
Feb 1, 2012 11:55am
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fan_from_texas

Senior Member

2,693 posts
Feb 1, 2012 12:02 PM
FWIW, we were in a similar position about a month ago but decided to pass. The biggest factor now isn't so much price (because your house will rebound at the same time theirs will, unless there's something unique that will make one rebound faster than the other), but interest rates, which are currently low.

Another factor to consider is how long you plan to stay in your current house. If you're planning eventually to sell and trade up at some point, you're going to have the realtor fees and closing costs anyway, so perhaps it's better to take the hit now and move into your terminal home. On the other hand, if you're otherwise happy with where you are and don't plan to make the move, it may not be worth it.
Feb 1, 2012 12:02pm
S

Steel Valley Football

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4,548 posts
Feb 1, 2012 12:07 PM
Con_Alma;1072122 wrote:Special? How so?

I'm not having this conversation again. You don't see it. The rest of us do.
Feb 1, 2012 12:07pm