CSEMARTIN Posted April 12, 2008 Share Posted April 12, 2008 I moved to Iowa last June, and my house in Michigan has been on the market for almost a year. After a year, my wife and I finally had an offer on our house. . that was the only good news. We had originally listed the house @94,500. After months of no takers, we dropped the price to 85,900. The offer came in at 78,000, but here is the kicker--the buyer wants us to give them the down payment and cover their closing costs. We countered at 82,900, and their response was take it or leave it. With the 3% down payment we're giving the buyer, and closing costs, and realtor fees, plus the difference in what we actually owe on the house, and with the loan we had to take out to replace the furnace, etc., we're taking a $16,000 loss just to get rid of the house. We got Sagnastied one last time. There goes the money I was planning to build my new shop!!! Link to comment Share on other sites More sharing options...
HSMITH Posted April 12, 2008 Share Posted April 12, 2008 Be glad to get out of there I guess, that really sucks but you could be living there still..... Link to comment Share on other sites More sharing options...
CSEMARTIN Posted April 12, 2008 Author Share Posted April 12, 2008 Be glad to get out of there I guess, that really sucks but you could be living there still..... Good point. I guess I should just thank my lucky stars that we found a buyer. There are a lot of people that haven't been so fortunate. The alternative would be to wait, and I don't like that prospect. Link to comment Share on other sites More sharing options...
HSMITH Posted April 12, 2008 Share Posted April 12, 2008 I am due to dump the house I am in now and buy another now but the market won't support it around here, I could sell this one for what I have in it but that isn't what the plan was. I could have sold it 6 months after I bought it for $60K more than I had in it, but right now it is really tough. My wife is a realtor, so we have a pretty good idea what is going on, and the readers digest version is that the market just sucks unless you have cash and want to buy. This is THE best market I have ever seen to buy, 25-40% gain on the money when the market comes back without doing a thing but making the payments!! I am still very tempted to sell this and bump up another 75-100K, when the market comes back I could sell it and buy a house like the one I am in now and have payments like a used car payment. That said, I am just glad that I can get out of this one with my money, there aren't many that can say that today. We had a boom here about 4 years ago, most everyone that bought in that time frame is hosed, they would be lucky to walk with a 25% loss. Houses for me are an investment and nothing more, some investments do better than others. It could always be worse. Think 'rental property' if you have the cash on hand. Link to comment Share on other sites More sharing options...
Viggen Posted April 12, 2008 Share Posted April 12, 2008 You did the wise thing. You sold now. This whole real estate bubble is not done unwinding, not by a long shot. The folks who choose to hold on and hope are going to not do as well... Good choice. Link to comment Share on other sites More sharing options...
EricW Posted April 12, 2008 Share Posted April 12, 2008 (edited) CSE, That's bad. But, that's nothing compared to what will happen here. The average home is still $250K-$300K+. The average income is $35K. Price drops of $10 to 15K are already very common here. I've heard of $100K drops down by Portland with still no takers. I was hoping the bubble would burst, but instead it's sort of a slow, droning flatulence. I'm in the market for a house, but I don't know how to afford one. Doing the math, it would appear the only way you can afford a home is to go deeper into debt each month via plastic. I guess I'm going to have to wait for reality to set in and for prices to decline to my income level. I'm just hoping that I can get into a house and lock in a mortgage rate before rates go back up to 12 and 15% like there were during the Carter years. 70's hyperinflation is going to come back with a vengeance. Edited April 12, 2008 by EricW Link to comment Share on other sites More sharing options...
ong45 Posted April 12, 2008 Share Posted April 12, 2008 Most people would have just walked away from a no win situation, you'r one of the rare ones. Like Viggen i believe this thing is about to get a lot worse, Alt-A will be the next dirty word. Have patience EricW , fundamentals have to come back in style sooner or later. Either values will go down to reflect incomes or we'll inflate our salaries to catch up. Link to comment Share on other sites More sharing options...
prreed10 Posted April 12, 2008 Share Posted April 12, 2008 Our house is for sale as well, but we still reside in ours. We just had a similar offer. We had just dropped the price $5K and the next week, we got an offer for $7 less than our new asking price + they wanted $6K for closing + $500 repairs, $500 home warranty, and our washer, dryer and refrigerator to convey. It was close to a $20K hit considering we had just dropped the price. After we finally came to an agreement, it was asking price, $5K in closing plus the other extras. We are not going to make as much as I would like, but it looks like it is going to sell. Link to comment Share on other sites More sharing options...
Tom S. Posted April 12, 2008 Share Posted April 12, 2008 It's too bad you weren't coming the other way (from Iowa to Michigan) because then you would have been on the sweet end of the stick! There are over 30 houses out there for every buyer, and as you have unfortunately found out, the buyers rule the market. I'm sorry for your loss. I too have lost a crap load of equity and there is no end in sight! At least you can put it behind you, and don't forget to see if there is some way to claim the loss on your taxes. Link to comment Share on other sites More sharing options...
CSEMARTIN Posted April 12, 2008 Author Share Posted April 12, 2008 and don't forget to see if there is some way to claim the loss on your taxes. I met with my tax guy--according to him, I can't claim a loss. Please, if anyone is any the wiser, I'm all ears. Link to comment Share on other sites More sharing options...
Joe4d Posted April 13, 2008 Share Posted April 13, 2008 I reely don unnerstan any of dis,, why dun ya jest call all yer buds an put the wheels back on it and move it on down to Iowa ? Link to comment Share on other sites More sharing options...
Greg Bell Posted April 13, 2008 Share Posted April 13, 2008 Chris, I feel your pain! I'm in the same position on the other side of the state. I lost my job in Nov and put it up for sale that week at $213 >> $205 >> $199 >> $195 when we got to $195 I got an offer for $185 plus 3% back to the buyer. I just can't write a check that big at close. Not sure how this is going to play out but it isn't going to be pretty. Link to comment Share on other sites More sharing options...
carinab Posted April 13, 2008 Share Posted April 13, 2008 I moved to Iowa last June, and my house in Michigan has been on the market for almost a year. After a year, my wife and I finally had an offer on our house. . that was the only good news. We had originally listed the house @94,500. After months of no takers, we dropped the price to 85,900. The offer came in at 78,000, but here is the kicker--the buyer wants us to give them the down payment and cover their closing costs. We countered at 82,900, and their response was take it or leave it. With the 3% down payment we're giving the buyer, and closing costs, and realtor fees, plus the difference in what we actually owe on the house, and with the loan we had to take out to replace the furnace, etc., we're taking a $16,000 loss just to get rid of the house. We got Sagnastied one last time. There goes the money I was planning to build my new shop!!! See if you can get the lender to agree to a short sale if the sales price doesn't cover the mortgage balance. That might move the loss figure down a bit.... Your tax guy might be right depending on the details.....capital gains is figured on the sale price of the house less the cost you paid for it plus any improvements (the furnace, any paint and perks). Unfortunately the cost of the mortgage doesn't figure in at all. I'd get a second opinion from another tax person. Link to comment Share on other sites More sharing options...
Joe4d Posted April 13, 2008 Share Posted April 13, 2008 The capital gains on primary residences went away, one of the Bush tax cuts. Back in the day you rolled your profit into the next house till you hit 60 years old then you excluded around 250,000. But in your case the tax cut was a double edge sword. No tax on the gain means no deduction for the loss. Link to comment Share on other sites More sharing options...
CSEMARTIN Posted April 13, 2008 Author Share Posted April 13, 2008 I reely don unnerstan any of dis,, why dun ya jest call all yer buds an put the wheels back on it and move it on down to Iowa ? I think you're reading between the lines just fine. I think yo unnerstan al' of dis brother. I'd get a second opinion from another tax person. Will do. Link to comment Share on other sites More sharing options...
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