should I sell my house?

Just wanting a few opinions from my fellow ATS peeps about the situation my wife and I are currently in.

We "own" a house in Australia and due to a potential relocation in our jobs, recently looked into selling or renting our house. We found out that we couldn't afford to rent it out and then rent a place ourselves due to our very high mortgage repayments. (we would have received less than 50% of our repayments from the rental income!)

So we obviously looked into selling and found out that if we got a decent price for our house we would basically come out even, if we don't get a good price then we might be down $10k or so. We now know that we won't be needing to relocate and are staying where we are.

What I'm really asking is if there is anyone else who, like me, (and not my wife) believes that we are on the brink of a serious down turn in the world economic situation, ie: Greece finally going, Spain and Portugal following them down the tube and then after the elections in the USA, they look to me as if they are on the brink of blowing the tube out of sight and i worry that we might be caught out in negative equity and then not be able to afford to sell it. Then if said situation does happen, who's job is really safe? Our's certainly wouldn't be! And to top this off, we have a 100% mortgage with my mother in law going as guarantor on our loan, we could end up basically in the banks pocket, both homes?!!

I want to sell, take a little hit if we have to, stay out of the market a couple of years and save up a cash deposit then get buy again in 2 or 3 years if the situation has come to some conclusion.

Thanks in advance.

If you owe, then it doesn't matter much, does it?

If you can, buy a house that is worth less than the one you have, and pay off the note, asap.

If things get as bad as you are saying, why would it matter how much you owe? Do you think the banks will just kick everyone out of their houses at the same time and expect people to just agree with it?

Come on man!

Think of it this way, if things get really bad, there aren't enough 1%'ers to control the rest of us. The logic is in the statistics.

I say, refinance your house at the longest term you can, save cash. Use the extra money for gold/silver. Invest in a garden.

By judging you by the US situation, I think that you are caught in a web you didn't design. I seriously doubt that you could sell your house and come anywhere near close of paying off the mortgage if, in fact, you can rent it for only about half of the mortgage payment. That situation you state seems to indicate a severe glut of housing in your area.

Given that the mother-in-law is on the hook if you fail to pay, you can't walk away and have no choice but to stay put if you can continue making the mortgage payments. At least, you have a house and values may raise again.

There is a reason land is called "Real" estate.
Never sell what you have unless you need to. If moving cannot get you what you owe on mortgage and what you will need from rent, does moving really make sense?

reply to post by woodnut86

I don't know how old you and your wife are, but if you are getting older, like 40s-50s you might want to consider lower level apartment living in your equation for the sake that when you get older you might not want to be spending time mowing your lawn , going up and down stairs, and performing routine maintenance, but rather renting and letting someone else take care of your physical burdens.

Originally posted by unb3k44n7
reply to post by woodnut86

 

I don't know how old you and your wife are, but if you are getting older, like 40s-50s you might want to consider lower level apartment living in your equation for the sake that when you get older you might not want to be spending time mowing your lawn , going up and down stairs, and performing routine maintenance, but rather renting and letting someone else take care of your physical burdens.

My parents at their mid 60s are just as mobile and almost as dexterous as myself in my early 30s (or my fiancee in her late 20s).
Otherwise, never expect renters to take care of any maintenance on your home. Every house I rented had lawn service, and it's the home owner's responsibility to keep the house maintained. At least it is here in California.

Hey Dude,

What part of OZ you from?
I have a bit of experience with Melb real estate.

If you really feel that its all gonna go down soon then you should sell your house as after the dust settles housing prices will be bugger all, one concern is that if you have the money from the sale sitting in the bank you could lose a chunk if not all of it.
If you sell be careful where you put the money..............

Its generally not a good idea to sell your home unless you have to either relocate or upgrade/downsize, think carefully

reply to post by IkNOwSTuff


We're in rural QLD. I definitely think we should just sell because it's about to go everywhere IMO and I doubt after agent fees that there will be any left over for us. If there was it won't be anywhere near a bank my friend.

I believe prices will keep on sliding down here and as you say, we could maybe pick one up for bugger all in a few years?

Originally posted by woodnut86
I believe prices will keep on sliding down here and as you say, we could maybe pick one up for bugger all in a few years?

But, what if that doesn't happen? The economy takes an upswing, or even simply stabilises? Short of armageddon, the population is going to continue to rise and housing will remain at a premium, demand greater than supply, in areas that have an active economy. Look around you and consider what will be the outcome of that in a few years time only in relation to your house. Then consider the interest rates in relation to your current mortgage.

Consider alternatives that could reduce your mortgage. Do you have a spare room that you could rent out? Check with any universities, colleges and schools whether they need host families for overseas student. They tend to be short-term, upto three months, sometimes more, and they pay good weekly rates. You can use this extra income to make additional capital repayments and therefore reduce the equity to loan ratio. This will also give you a buffer should the interest rates go up.

Even if you put the house on the market, it could take a while to sell, and if the market is perceived to be unstable then you may have to take a reduced offer, so best to take action now and look to improve your current situation anyway. I am in the UK, but I am currently in the process of selling my house, rather than the usual six to eight weeks, it is now running into three months, that is almost entirely due to over caution lenders. That is really the only thing that is holding back the market, people want to buy, people want to sell, but lenders are making it prohibitive to borrow and are slowing the market down inexorably and forcing anally retentive chartered surveyors to under value properties for fear of penalisation by said lenders and borrowers alike.

Interest rates are too low and therefore it is not worth their while to lend to homeowners on long term loans. Very few borrowers are permitted to make 100% mortgages, and many are requesting as much as a 30% minimum deposit. This purposely drives the banks reserves as more people are forced to save for these deposits, which because of low interest rates does not cost them so much. So even if you are not in the UK, the UK bank market is having a roll down effect, because it is sterling, and sterling is one of the currencies that drive the global economy. All those that borrow, trade and facilitate with sterling will be experiencing the bank of England low base rates.

I would not be looking to change your position as radically as you propose, you are far better looking to consolidate it, that way, however things go, your position is improved. You currently have a home, and as long as you can meet the mortgage payments, that position is secure. By looking too far ahead you are risking considering all the variables, remember as long as people cannot afford to buy, rents will keep rising, and even is nothing at all changes, energy prices will keep on rising too. Focus on the here and now, and look to strengthen your position one way or another.

reply to post by woodnut86


I would advise trying to take advantage of the situation. By that i mean sell your current home, buy a much bigger but run down home and then live in it while doing it up. Then keep or sell, as you wish. Either way, you will be in a much better position than you are currently. If you do go down this route though just be advised that you will have several very uncomfortable months until the home is more liveable!