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I recently relocated to the Chicago area from the Memphis area. I have a relocation package from my

company that will pay realtor fees. Have been unable to sell house in 3 months, and have it priced just higher than what I owe. Should I consider renting for 12-24 months or lower price and take small loss if needed?
List price is $365k, so fees would be 22k.
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September 04 2013 - Chicago
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Answers (8)

Yes you should consider renting it out if its a money maker.  Your home should have sold by now if was priced right.  We are in a hot market and anything priced right sells in 30 days in any market.  I need to know more details to advise you properly.
- how long is your relo package good for?
- can you make money by renting out your Memphis property? If no, then dump it and take a small hit now.
- are you getting any offers? hows showing traffic?
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September 11 2013
Each Real Estate Market is local... Right now almost everywhere the prices are going up. Regarding buying or renting here, I will say buy with an FHA loan if you don't have enough down payment, as even though we are not sure if prices are going to go up or by how much will go up, I can assure you the interest rates are raising quickly and in couple years you'll pay a lot more for your new house between purchase price and financing than now...
Plus, equity is like water in a bucket. By selling at a loss now, you are buying a home at a lower price now than in 2 years, and at lower interest rates. Keep in mind that for each 1% raise in interest rate, your mortgage payment will go up $100/ month for each $100,000 in purchase price. For example, for a $300,000 loan, in one year, you'll be paying $3600 more, looking over 10 years of payments, that is $36,000 paid for the same price, however 1% higher interest rate increase....

My final advice is to sell your Memphis house and buy in Chicago! 
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September 07 2013
You are fortunate that you have a Relo agreement which will cover realtor fees, perhaps the seller closing costs/transfer taxes as well? I would suggest that you tweak the numbers as close as possible and decide whether you are willing to come to closing with a check. Obviously, it's less than desirable to come to closing with funds, but if you want to cut the ties from your home in Memphis now may not be a bad time. Yes, you may have less to put down on your new home, but it may be a good option. I'm seeing more of this lately.

From a mortgage qualifying standpoint, if you do not sell the Memphis property, and you want to buy in Chicagoland now, you will need to qualify using both your current and new purchase payments - Principal, Interest, Taxes, Insurance, HOA, etc. For both properties. Ouch.
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September 05 2013
If you Need to sell before you purchase, you may want to sell it below market value just so you can free up room in your financial budget. 

If you can & are ready to purchase now (w/o selling your current home), renting until next year may be a benefit. Especially if you're renting to a responsible family member.

Renting your home to a stranger still puts you at risk for unwanted repairs & possible unnecessary maintenance fees. 
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September 05 2013
Rent it. Market is picking up, so you can get some nice income and then sell for a profit later.
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September 04 2013
Having a relo package covering the agent fees is a huge benefit, and offsets what you are losing. It's very tough for many people who need to sell, but whose house is worth less than when purchased. Unfortunately, a buyer wants to pay what a hour is worth, and not so much about what is owed. A house should be priced at market value, otherwise it's a bit of a waste of time on everyone's part. If you wait to sell there are 2 problems. One is that your relo benefits will expire. The loss of that benefit will be difficult to make up in a year or two (what if prices actually go down?), so you'd have to be up enough to cover that loss first before you could consider anything an advantage. Also, as interest rates go up buyers will be able to afford less and it could affect the market. Along with that it will make buyers who have houses to sell first less likely to want to give up their outstanding interest rates they currently have.
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September 04 2013
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Thanks, I am renting here, and my son is actually there and could help manage. I am wondering if the tax advantages would be worth the headache, and wait for market to rebound some...
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September 04 2013
Depends on the size of the lost. But you will be here and the house there for rental. Is it worth the headache.?
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September 04 2013
 
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