Hi, Jonathan Phillips, your Local Real Estate Agent in Pierce County, Washington. I wanted to touch base with this week's edition of Housing News. I will educate you on housing issues that affect homeowners in today's crazy times.
Here is what I am going to cover in today's issue:
* Walk Away or STAY in your Home?
* Why December is the best time to buy a home.
If you have any pressing real estate needs or questions, then you can reach me at 1-800-LISTING. Or, e-mail me at Phillips Realty LLC.
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Walk Away or STAY in your Home?
Many people are asking themselves this question. It's also a very controversial question. People who are paying their mortgage feel very strongly that walking away is wrong.
Then you have with people that literally cannot afford their house and are struggling every day to keep the lights on. They should walk away, but won't because of the peer pressure.
You have to make the decision on what is best for your family. Here is what to consider when making this decision.
Here is a blog post that I wrote about this exact issue last week:
Tacoma WA Short Sales: Walk Away or Stay?
November 2, 2010. Tacoma WA –Should you walk away or should you stay? Here is how to determine whether or not you should walk away from your home. Because of the decline in the nationwide housing market, I doubt that your home is worth what you paid for it.
First, determine the current market value of your home. Talk to a realtor. They will give you a market analysis, based on what other homes similar to yours are selling for.
For example, we recently helped a home seller who had paid around $700,000 for his home. We thought the home was worth about $400,000. His mortgage payment was a little over $4500 a month.
When you add in the property taxes and insurance his total monthly payment was around $5,300 a month. Similar homes were renting for around $2,500 a month.
If you compared rental payments, he was way upside down on his home. We ran the numbers and saw that he was on track to repay $1,697,000 over the life of loan.
Next, let’s look at how much he would save by short selling and renting a similar house for two years. First, he would be saving $2500 a month by renting a similar home. In addition when he bought a similar home for $400,000 then he would repay around $934,000 over 30 years.
$1,697,000 minus $934,000 is $763,000. That means he would save $763,000 in mortgage payments over the next 30 years. What can you do with $763,000?
Would it make retirement easier? You probably could completely pay for 3-4 kid’s college tuition. Most people could put 6-7 kids thru college with that kind of money.
Or, he could retire a few years early. Enjoy a little bit more of the “Golden Years.”
It appears that he would be doing better for himself and his family by short selling the house. The bank was probably bailed out by the American Taxpayers. If he pays taxes, then he helped out with that bailout.
This is why I recommend that you look at all the numbers when you are trying to determine whether or not you should walk away. How much money will you be repaying over the life of the loan? Just Google “amortization calculator” and run the numbers.
Add up how much money you would be paying back with your current home and compare it to how much you would pay if you short sold, rented for two years, and bought another home after that.
Do you agree with this article? Or do you think this is wrong? Please comment on my blog post about this story. Go here to comment: http://www.piercecountyshortsaleblog.com .
This article is part of our effort to educate homeowners facing foreclosure. I offer a number of free resources to help homeowners avoid foreclosure. They are available on my blog: http://www.piercecountyshortsaleblog.com.
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Why New Year is the best time to buy a home.
This is best time to buy a home. Right now from December through February. Why?
* Everybody else stops looking at homes.
* Lots of Sellers HAVE to be SOLD by the end of the year...and they DIDN'T!
Yes, everybody makes plans in their life. So many of those plans are based off the end of the year.
Many homeowners have to be moved to Atlanta or Nashville or New York by the end of the year. Do you think they will be in a very motivated state to sell their house?
It's probably the worst time to sell because there's hardly any buyers in the marketplace.
So here is how to use the end of the year to your advantage.
1. Find a realtor who will get you the best deal possible. (Ahem...ME!)
2. Review all the homes in the marketplace and see which one fits the parameters of what you're looking for.
3. Pick the top 20 and go in there and take a look at them.
4. Most important: Do the process of elimination before you leave that home.When you go inside each and every house make a decision before you leave if is this house that I be happy living in for the next 5-10 year. If it's not, hit the road.
Throw away all the information about the home and never go back to look at it again. Thinking about too many homes drags people down.
Being on the fence "do I like the house", or "I do not like the house" and you never make a decision and you never end up finding that perfect house for a amazing price!
So make sure you find yourself a house this year and save yourself thousands, and thousands of dollars.
Keep in mind 2010 will be the bottom of the marketplace after what happened on election day. The market is going to come back and you're going to be paying more money later for a home than if you bought it right now.
If you want to work with an agent that has all your interest in mind and truly wants to help you get the best deal, then give us a call at 1-800-LISTING.
Or, give me more information on what you are looking for at this link: http://www.piercecountyshortsaleblog.com/buyers.
Well, that's all folks. If you have any real estate related questions, then please e-mail them to me at mailto:jcphillips@gmail.com">jcphillips@gmail.com. Thanks for reading this. See you next week.
Sincerely,
Jonathan Phillips
Phillips Realty LLC
Phone Number: 1-800-LISTING
E-mail: Phillips Realty LLC
