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Should we sell our house now?

February 22nd, 2015 at 09:07 am

So we are not sure what to do whether we should sell our home and rent. Background and some information. We are planning on moving June 2016 no matter what. DH is quitting his job and we are leaving the area to relocated cross country. This could happen sooner if the right opportunity arises. Unfortunately his most recent interview did not work out. So we plan on selling our townhouse next spring no matter what. But we have one year to live where currently are or sell.

We live in a nice 3bd/2.5ba townhouse (1700 sq ft) with parking spots in good school district. DH commute is 30 minutes driving and 1 hour by public transit. We owe $385k on our place and conservatively we could sell for $750k right now. Our current monthly payments are $1700 mortgage, $550 property taxes, $250 HOA = $2500/month. Our utilities we pay a balanced budget of $250 electric and $300 natural gas (last month our gas/heat bill was $700).

If we were to move we would be looking at paying around $2k/month to rent a 2 bd condo 1200 sq ft. However it would be a 30 minute commute by public transit and less driving. A few of these rentals include heat and hot water including one I found for $2195/month 2 bd. The school district is also good but the commuting location is better.

So the question is should we sell our place and lock in our equity? Perhaps it'll go up more in the next year but we are really betting on is that nothing will happen to our condo in the next year. That we won't be hit by any big repairs.

When I look at it I know financially it makes most sense to stay put right? I mean we are paying around $850 interest and $850 principal. And the interest and property taxes are deductible and principal payments are enforced savings. So in effect we are paying to rent our place $1300/month with HOA + interest/property taxes (taxes deducted out). Versus $2k to rent a smaller but better located apartment.

So how do I calculate what's better? What am I missing out?

11 Responses to “Should we sell our house now?”

  1. ThriftoRama Says:

    Hmmmm. I would stay put. That is just me. Moving and sorting pack is a big undertaking and there are always expenses in moving. If you move now, you're signing up for two moves instead of one. It sounds like a lot of extra work for minimal pay off. And, you'd have a landlord.

  2. creditcardfree Says:

    I agree with ThriftoRama stay.

  3. snafu Says:

    Before you take irreversible action, any feedback to help DH understand why he's not yet the successful candidate in the many applications? Has he been getting offers that melted during negotiated details? Do you believe your TH is ready to show to prospective buyers?

    Thriftorama makes an excellent point about the work and costs involved in packing and fees for changing utilities, movers, realtor costs, legal costs, changing auto licences, registration, notifying all contacts, services etc. Also consider the disruptions when your home is being shown to prospective buyers, realtors, comparisons, and looky-loos.

  4. bluesfemme Says:

    How old is your place, and, if the neighbourhood has similar-aged homes, are they experiencing maintenance issues?

    We've just sold our 11 yr house, and talking to the neighbours they've recently paid out for a garage motor and hws. We've just had to replace fans, and think there is definitely a 10-12 yr period in which stuff goes.

  5. PatientSaver Says:

    I'm not sure that moving now as opposed to next year will make that much difference, and it would be a whole lot more hassle, as the others pointed out.

  6. scfr Says:

    The only circumstances under which I'd recommend selling now is if the rental you mention would be a month-to-month lease, but I know the odds of that are extremely slim.

  7. MonkeyMama Says:

    I'll play devil's advocate a bit. What if the value of your home drops substantially due to short term market fluctuations? (e.g. We had planned to sell our last home the week of 9/11. Walk about random unforeseen circumstance as to home values. But that experience helped us keep our heads in the ensuing debt bubble). I'd just consider the worst case. From a mathematical standpoint the renting will cost more, but that doesn't take into account all the question marks that you remove by just selling now. Taking away those question marks could make your next move a lot easier.

    Of course, moving sucks and I imagine moving with small kids sucks even more. You run the risk of doing all that just to lose future home equity gains. I don't think there is a clear answer, but I would just run through your feelings on each potential scenario. What risks are you willing to take and what results are you willing to live with?

  8. LivingAlmostLarge Says:

    Snafu, he said they were looking for a specific personality and he wasn't it.

    Thrift and CCF thanks I am definitely going to have to weigh the costs. Although maybe it would be mitigated by selling off everything unnecessary to move into a smaller place!

    SCFR I am looking for month to month or a lease we can break.

    MM I am worried for many reasons. I don't want to get stuck in a fight with my neighbors over them not paying their HOA or their home going into foreclosure. I don't like the uneasiness that comes with what if we don't sell by the time we want to move. I am getting queasy thinking of landlording at a distance.

  9. scfr Says:

    Hmmm ... If there are month to month lease opportunities, then it's worth thinking about. Even though moving is hard work and stressful, if you had the townhome sale out of the way it would give you so much more flexibility when it comes time to make the big move.

    Food for thought: You could always list your townhome and see how it goes. Just brace yourself for what it involves. Living in an actively listed house is not easy, and I can't even image what it's like with small kids (needing to keep it spotless and ready to show at a moment's notice ... needing the swoop the kids & pets up and get them out of the house even if it's nap time when an agent calls from the DRIVEWAY wanting to show your house, not daring to cook seafood or curry because of the smells ... etc ... etc ... etc).
    If you get tired of it, there is no law that says you can't take it off the market.

  10. LivingAlmostLarge Says:

    SCFR I am worried about living through the selling but there are some month to month opportunities. It does give us a lot of flexibility. I am worried about so many things and so many possibilities.

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