What would you do?

[mateosbaby]

Our house just plain isn't selling. We really need to move and get something bigger. The only complaints we've heard is they don't like the layout and the low, slanted ceilings upstairs. We're never gonna sell the thing. We paid $115,000 5 years ago, and we are now down to $119,000 asking. We are losing money on the house already because of all the work we've put into it (reshingling, sistering joists under the house in the crawlspace as they were rotting, painting, new carpet, general "make it pretty" stuff, etc.). So here's our idea. Rent it! But we can't as long as we have the WHEDA loan out (a WI down payment assistance loan for 1st-time home buyers). The WHEDA loan has $2655 left on it. I haven't done 2008 taxes yet, but I amended my '07 taxes and am getting a nice $1500 or so rebate from that. I expect a pretty good size refund for '08 as well. So our thought is, take some of that rebate money and put it into our house down payment fund. Take a little more and put it into our "moving expenses" fund (U-Haul, paying someone to help move stuff, moving the storage unit, etc.) Use any leftover rebate money to help pay down the WHEDA loan, or even pay it off. Then snowball it instead of the credit card. Then we'll have the option to either sell or rent the house.

Does this sound like a reasonable idea? Or do you have any better ideas?

[Patty A]

Sara you said you needed something bigger.....have you thought about adding on to the house you have now? That way you wouldn't have to get rid of the house. Also if the house don't rent can you afford to make both payments, one on it and one on the new house you plan on getting?
Just thinking that with the economy so bad it might not rent fast and you may be faced with two house payments.......

[Greebo]

One should not become a landlord unless it's something one WANTS to do.

List it for less?

[homesteadmamma]

My advice would to stay in it until the economy turns around. If it doesn't rent, having two payments is going to be very tough to do. You won't just have two mortgages, you have to heat it, taxes, etc. etc. We did it for 4 months, 7 years ago and it wasn't easy.

[sabrelvssammy]

kudos to greebo ! trust me...unless you have a very strong stomach...really think thru this rental thing.... i have been thru the ringer with this stuff (i know...there are people out there that have had no problem...i have had FEW of those)...but it has been my experience that the majority overrides the minority... and especially if you plan on trying to sell the place in the near future.... my properties that were bought to be rentals have taken a beating and i have expected and planned for that because my intention is to hold them for 20 yrs and then sell off one by one.... however, my personal home i tried to sell for 3 yrs and finally agreed to a 2-yr contract with a balloon payment...$30,000 down... they are 6 months into the contract (they have their own house to sell..which they have been trying for 2 yrs) not sold.... well guess what....they are out of jobs now....that means it is very possible that i am getting my house back....now i get to keep the $30,000...but....i had broker fees to pay...my house has lost value due to the economy....their upkeep (or lack of i have to say) the house will have to go back on the market....this could turn into a huge mess if they do indeed back out...(and right now...things are not looking good for either of us)....

if i were you...i would stay put...it may not be your 'dream' home right now but there is plenty of time for that...keep it on the market...just keep plugging along....save your money (you can put a larger down payment down on your next house that way...lower monthly pmts...)
the tide will turn....eventually.... someone will come along that will think the house is perfect...(you guys bought it after all right?)

i had a house once that we had on the market for 2 yrs.... it was a custom -modern house that we built (that didn't appeal to everyone)...we listened to the gripes from showings and after 2 yrs made some changes (moving walls, etc) and do you know what...the house sold 1 month after we dumped money into it and the people took it right back to the way we had it....ugh.....

hang in there.........

[Judi Dial]

My immediate reaction is the same as one above. If you can, and you HAVE to have more space, mod the current house to make it larger? That way you know up front what you're getting and you control what happens, when.

I would NOT buy a 2nd house right now.

Judi

[TexasPeanut]

My advice, stay and add on if possible. Do you really need something bigger, or are you just feeling cramped? Could you try getting rid of some things to make more use of your space? Are you living in a 1 bedroom home and all the sudden have 5 kids lol? No one likes being cramped but in this day and age people need to get used to things they may not like. So if you really need the extra space, try adding on a room above the garage.....off the kitchen, wherever you can.

I wholeheartedly advise against renting it, especially right now. Have you though ahead if the renter loses their job and simply can't pay the rent anymore? You have to go through the eviction process, cleaning up and trying to re-rent the property. That might be taking on more than you can handle at the moment.

I have never understood why people spend money to make a home look pretty in an attempt to sale a home knowing it's not a guarantee you will ever recoup that cost. The only thing you should do is make sure the home is clean and free of clutter if you are still living there, possibly new paint inside and out if needed...and steam clean the carpets. That's it no other cost should go into a home to make it look salable to someone. You may never get that money back, not anymore...the day of spending a small fortune to up the asking price and flip the house are over.

If a major repair needs to be done, do it. But you can't honestly expect a new buyer to pay for that cost, if you were still living there you would have had to do the repair anyway. If you purchased the home 5 years ago and have generally maintained that home with usual maintenance and repairs that were needed to be done you can't expect to include that cost in the selling price. Sistering joints in the crawlspace to keep the foundation of the home from tumbling to the ground isn't a cost you can make the new buyer pay, it's part of maintaining that home. You just happened to be the owner at the time it needed to be done.

You paid $115,000 (probably over-inflated at the time) for that home and are trying to sell it for $119,000 5 years later. You say you are losing money on it because of the money you've spent repairing things (needed things that would have to be done anyway) and making changes (not needed), you've gotten your use out of the new carpet and other changes you've made, either stay and adapt to the home, or lower the asking price to something more reasonable for what it is, the location, and of course the financial times we are going through. You may take a hit and definitely not get any form of a profit but if you really need to sell it that may be the only way.

[kmonokwe]

Sara, The only good idea up there that I can see is hanging tight in your too-small house for now. None of the alternatives seem like wise decisions. Building on may suit your needs now, but remember to consider how much you'll pay into such an addition, and whether it will increase the value of the house. It ought to increase the value by at least as much as you put in! The big challenge here is the down economy. Keep in mind that the market value of something is what someone else will pay for it. Currently, no one can afford to buy a house. There for the market value of your home has tanked. However, you paid out for that house, so its personal value (to you) is a lot higher than market value. I'd suggest you suck it up and stick it out in your too-small house until the market value begins to improve again. I'm confident it will, even if it takes a year or two or three.

[rainbowgc]

I think there are so many desperate people right now, that if you rent you take a chance on not getting paid rent.

[Cricketlegs]

My dh wants to sell and move to a bigger new house.

I am fighting every step of the way. We have a tone of things that need doing and he isn't much of one for home improvements so that helps too lol.

I love my house payment. $553(insurance and escrow and taxes are in this tiny price!) for a modest 3 bedroom 1 and 1/2 bath brick with double carport on a nice large lot in a curbed neighborhood in our school district.

Why would I want to move NOW in this economy when I have DEBT????

Yup, if he sells it out from under me I will go but I will go kicking and screaming the whole way!

Cricketlegs has bills!

[Persimmon Lace]

Could you get rid of some stuff and declutter to find more space? I wouldn't even try to get anything else in this economy. Sometimes it's just best to stay where you are. Sometimes, it's all about being content where you are.

[Denvergirlie]

Absolutely wouldn't rent it, unless you are going to be renting yourselves, but you do not want to own two houses.

Sadly you can not consider what you paid for the property nor the cost of repairs that you've done. If the house isn't selling at the listed price, then it's really not worth that much. Keep lowering the price, it will sell eventually, and then you'll know what it's true value is. A house is only worth as much as someone else is willing to pay for it.

You say you need a bigger place... can you remodel any and make the layout work better? Knocking down a non-support wall is pretty easy. Add on? Declutter? Bring in new organizational methods? Add a shed in the backyard to handle overflow seasonal stuff?

[mateosbaby]

Our house sucks. Literally. There is no basement, only a crawlspace (and crawling isn't even the right term, you really have to slide on your belly to do anything under there). The garage is detached and "sinking" into the ground because when they built it, they didn't put the right footings in (many years ago, like 1950s or so). You can't park anything bigger than a car in it, and we have a minivan. There is lots of room for storage in there, but you have mice to deal with in any garage setting. The yard is extremely small. Was great for a family with 1.5 kids, but not so great now when they're older and need some more space (and I really want a much bigger garden than the one I have now, with room for about 8 corn plants, a few bean plants, and a couple pumpkins). As for the house itself, the layout is absolutely horrid. We have the master bedroom off the living room, straight across from the front door. The kitchen is poorly laid out, and the back of the house was added on in pieces (the bathroom, the pantry, the laundry/utility room, and the sunroom), so it's very awkward getting from one room to another. The stairs are narrow, but they suffice. Upstairs (which is a finished attic), the ceilings are very low (my husband is 5'10" and has about 1" - 1 1/2" to spare up there), and they're slanted because of the 4 dormers, one on each side of the house. There's no room to put a normal size bed in the only bedroom with heat, but toddler beds and cribs work great. The other bedroom is tinier yet, although a bed would fit in there, but not very nicely. It's a very cute house, but poorly thought out. Back then, they didn't have to get anything approved, they just went ahead and did it without asking anyone first.

So if we added on, we'd have to go up. But if we do that, we have to fix the footings, because they are not strong enough to hold a 2nd story. Well, if you're doing all of that, you may as well add the basement that everyone wants. By the time you do all that work, you may as well buy a new house that has all that stuff already. That's a lot of money to put into it. The other thing to consider is that the rest of the houses in the neighborhood are all ranch or story-and-a-half. If we put a full 2nd story in, it wouldn't match the neighborhood, which is also bad for resale. Half the houses in the neighborhood have basements, and the other half does not, so that wouldn't matter either way. Most have garages, but they are all pretty small, and most cars do not fit in them (width or height). There aren't too many people who actually use their garages for cars.

As for staying put, we would but we seriously have no where to put this new baby coming. We have the 3 girls in that one room with heat, and there is just no more room for another kid in there. We can't put him in the other room with no heat, of course. I've thought about putting their bedroom in the main room that we use as a toy room, but that's not much better because of the deep slant of the ceiling. You wouldn't get many beds in there, either, of any size. Plus the placement of closets and windows also makes it impossible to put more than 1 bed out there. We also need room for our desks and computers. We can't have them in a place where the little ones will get at them easily. At least in this 2nd bedroom (the one with no heat), we are able to shut the door and lock it when they are small (not locking them out while we're in here - that sounds kind of bad LOL).

As for decluttering, I have. Immensely. There's nothing left to declutter.

I know you guys are trying to help, and I appreciate it, but I guess you have to see the house and what we have to work with in order to understand that there really is nothing we can do with this house to make it work. We do have pics online with our realtor: www.shorewest.com and the MLS ID is 1029726. But everyone likes the pics, then comes for a showing and hates the layout.

My other problem is the storage unit. It's sitting in our driveway, costing us about $100 a month. The stuff in it is stuff we didn't immediately need, so we packed it up to declutter for showing the house. I want that stuff back. It's our Christmas stuff (it was a very scant Christmas this year), baby stuff (which I NEED ASAP, but it's in the back, so good luck getting to it), it's extra furniture that we want but needed to clear out to make the rooms look bigger (like my dresser - husband and I are sharing 4 drawers right now, and it's TOUGH), the kids' extra toys (which they really miss), extra clothes, just lots of things that were "extra" that I didn't necessarily "need" but still most definitely want/need to keep. It's nothing we don't really truly need/want. But husband says he's not unloading it again after we just loaded the thing. And I don't blame him. I can't lift much right now, so I can't help. And I know my BIL would be annoyed if he helped take the heaviest things out only to bring them back in again. I told husband, if we're staying here and taking the house off the market, I want my life back, which means that stuff is coming back in. It's been a year since we got that storage unit, and it's seriously irritating me to not have stuff that I want access to again. I had to buy new muffin pans because ours were packed, and go figure, daughter's PreK class needed me to make cupcakes one time. There have been a few things around the house that I really wished I had access to the box out there because I could have really used it.

If we drop the price, we will owe on our current mortgage at closing. As it is, that is probably what would happen as hardly anyone will offer asking price right now. How will we get a new house if we still owe on this one? I'm not sure how all that works, but I do know that even if we wrap this mortgage into the next one, we will be able to afford even less of a house, and we can't afford a lot as it is. There's barely anything out there in our price range right now. Everything that is for sale is cheap and small like ours.

I really feel like we are trapped and there's nowhere to turn. I wish so much that I could try one of your ideas, even staying here with the too-small cramped quarters, but it just doesn't seem like an option. It seems like each idea we think about just plain won't work after we really start to look at the details of it. I don't know, I'm just plain sick of it, I guess. It's very depressing.

[Debbie-cat]

I agree with Greebo. Being a landlord is not a fun thing to be if you haven't done it before and you don't know what you are facing. Good luck though with whatever you choose. You know your own situation best.

[sabrelvssammy]

mateo- i really do feel your grief....we bought another house to move to (was a sheriff sale so i had to act on it quickly)...we knew we wanted to move there eventually and the house needed alot of work to make it 'ours'.... i was so sick of living in the other house...lots of reasons...but that's not the point right now...i just couldn't wait to GET OUT of there.... so we had an option with having the two houses....stay in our current one and rent out the new one til ours sold (the reasoning behind this was the tenants could go ahead and tear the house up...which is our experience) because we were planning on gutting the whole thing before we moved in...or go ahead and get started on the 'new' house and put ours on the market and hope it sold before we were finished with the remodel... well guess which one we picked.... we started on the remodel...finished...moved...and our house sat on the market for 1 year...then we decided to put tenants in it...(had an arrangement that they were on a month-to-month lease and that the house stayed on the market the whole time and if it sold they had to move...) well after 2 yrs of tenants (and some repairs) we finally sold it...on contract no less... now the new people are in it for 6 months...they have been layed off and its possible we will get the house back to start all over again.... ugh....

if i could do it all again....i would do things entirely differently....i would have stayed in the house til it sold....kept the 'new' house rented until i was ready for it...remodeled it at that time and then moved....

BUT....i let my heart rule over my head.... i was sooo sick of it and eager to get out of there that i made not the best choice...now it has come back to bite me in the rear..... my house was not and is not a 'rental' property and it despairs me not only to see it going downhill but that i am possibly getting it back to deal with.... had i gone the other route...the smarter one....i wouldn't be here telling you about this now....

i know that 'noone' else really can understand 'your' position unless they are truly living it...but i gotta tell ya from my own ordeal that i would rather have suffered more in the beginning by staying there a little longer than what i have been dealing with for the past 3 yrs....really think this thing thru and look at ALL the angles and the worst case scenarios so that you can be prepared if things don't turn out the way you hope....

don't worry...one day your house WILL sell..... just hang in there whatever you decide....