Profile picture for Suzbo21728

Need help deciding to continue trying to sell or just rent my condo [le sigh]

I need some help! My husband and I are trying to sell our condo as we'd like to move out of the city and closer to family, but I'm having some doubts given we've had about 13-14 showings and zero offers. 

We have a great 2 bedroom, 2 bath condo in an "up and coming - yet still somewhat rough around the edges" neighborhood. I honestly thought I'd be able to sell this place after 3-4 years and make a decent profit, but with the lingering recession and neighborhood misgivings, I feel like we're stuck. I'm already taking a loss on the listing price so I don't want to drop the price (and honestly, I couldn't afford to) to encourage a sale. But I also don't want to feel like my life is on hold until we can move/sell our home. 

We're thinking of renting at this point, just to get the heck out of dodge and be done with the constant cleaning/showings/stress of trying to sell. But I also know I should be patient and I'm a little weary of trying to rent a place out and not living in the same city or state! 

Looking for advice on what is the best thing to do and any tips you might have - one way or the other. 

Thanks very much!
S.
  • September 03 2013 - Chicago
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Answers (30)

It's my experiance that when a "nice" property has that many showings, with no offers, well then, sorry to say it's probably overpriced. I say that nicely, not to offend, but that's how the market is. It happens. You might be trying to just break even, therefore you can't lower it any further, so wait it out if you can, and the rent covers your PITI.

Best wishes to you and your family.

PS: people like to "just check it out", because their curiosity gets the best of them, and they say "oh well, its garden unit, but it looks really nice inside, that's okay" or maybe they are not familiar with garden units, or think they are just on the first floor, but once they actually get there and see it, and feel how they are, they think differently. Garden units in neighborhoods with documented high crime incidents which you can find online, are a tough sell because of the feeling of vulnerability being on that street level.

  • November 04 2013
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Profile picture for Suzbo21728
For those interested, we've listed our place for rental and have also dropped the selling the price. Neither have caused much movement...unfortunately. We're going to drop our rent price to see if that will have an impact so we'll see. We figure, we'll be renting for a lot cheaper once we move and will still end up making money even if our rent price here is a little lower than we'd like. 

For those wondering about feedback, our place always receives an "excellent" showing status, but people's top complaint is this: "it's a garden and I want a higher floor."  I don't understand why someone comes to look at it if they don't want a garden apt or condo?! 

Regardless, this whole process will be over soon and we won't live here and life will be even better. Thanks to all for the input!
  • October 27 2013
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It sounds like your over priced still. If you cant afford to go down any lower then I would rent it for a year and try again to sell later. Make sure you fund an agent who has a lot of leasing experience to help you. Tenants have all the rights in Chicago.
  • October 22 2013
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[self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
  • October 21 2013
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Profile picture for j3350489
If you think the area is going to come up I would rent it as long as you cover all of you over head . Make sure you really screen the tenants . I have rentals and I go above and beyond checking out my tenants . I would rather lose a few months rent and get great tenants than rent to anyone then have thousands of dollars of damage .. If the area is going to boom hold out and collect when it booms . I would do a one year lease then go month to month just incase the area takes off sooner than later .
  • October 11 2013
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What kind of feedback are the showings agents giving you? 
  • October 11 2013
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If you price your place right it should sell in this market. If your arent going to get what you need form the sale then consider renting it in the meantime and sell later. Contact an agent to help with the rental though. Tenants have all the rights in Chicago so you need an experienced agent who can make sure your protected as a landlord.
  • September 13 2013
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Profile picture for marc jablon

Renting - the positive and the negative

There are good and bad points to renting.  If you get a good tenant who pays the rent on time --and if the rent you are able to charge covers your carrying costs and nets a profit -- renting is a positive.

However, if you have a problem tenant, you are faced with a) no rent and b) costs of evicting that tenant.  Oh yes, and c) inability to easily show the condo while the tenant (whether it is a good or bad tenant) is in it.

If your tenant is paying rent and the property has potential, you may be able to sell it to an investor. However, typically investors look for a current profit margin built into the rent along with a sufficient upside in case they decide to sell down the road. 

Most savvy investors will not purchase a condo unless it is already highly saleable at or ahead of the purchase price.

Selling questions to consider

If you are that eager to leave the property, and you have not already done this,  it may make sense to lower the purchase price to a point where it meets the comparable sales prices in the neighborhood during the last 90 days.

In our area, sellers new to the market tend to look at recent comps and then price above those comps, figuring the market al moving ahead on a monthly basis.

If you have followed the new seller formula of pricing above recent comps, then your asking price may be on a par with other new sellers, but still be running ahead of what most buyers are willing to pay.

The questions to answer are: how much money do you need to make from this house in order to purchase one that you want?  what is the minimum amount you can sell the property for without creating a present or future financial problem for yourself? How eager/anxious are you to purchase a home somewhere else?

  • September 11 2013
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rent it if it makes you money after expenses.  use an agent and a pro management company.
  • September 11 2013
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It seems to me that you are having 1-2 showings a week, which means that the property is priced about 5-10% higher than the price will sell. Give it a bit more time and if you can't sell within the time you need to move, than rent it out.

Good luck to you! 
  • September 07 2013
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The market is erratic, SuzBo, and it may be that rising interest rates have dampened the enthusiasm of prospective buyers in your neighborhood.

But the "why" almost doesn't matter. You have a life to live, and I think you shouldn't make any rash decisions just yet. We've just come out of a three-day weekend, there may be some activity this week, but I urge you - please - don't make the decision without consulting with an accountant.

All the best,
  • September 04 2013
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Your realtor should be able to give you all information about renting.  A lot of realtors do property management as well as working with buyers and sellers.  Chances are your realtor can either help you, or they know some one in their office who can.  
  • September 04 2013
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Profile picture for user4051408
Do a quick calculation...Subtract the total cost of owning the property from the potential rent you could bring in. Also consider property manager expenses as this will lighten your burden of management since you'll be out of state... If you can bring in more than it costs I would say keep it!! There are tons more benefits to owning a rental than just future appreciation.

A great website for learning about rental benefits is www.yourrealestatelearning.com. It has helped me a ton. Good luck to you.

-Mitch
  • September 04 2013
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Profile picture for Pinyo B
If you're going to become a landlord, start familiarizing yourself with the local law, e.g., http://www.cityofchicago.org/city/en/depts/dcd/supp_info/rents_right.html

Your realtor can also assist you and find you a renter. This typically cost ~1 month rent.
  • September 04 2013
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Profile picture for Suzbo21728
@TY - yes, I have it listed with a broker and it's staged correctly. Our realtor also did a market analysis of the surrounding area and units similar to ours so we priced it right. Everyone she's talked to (e.g. other agents) have all agreed the price is right. So, not sure what the dealio is?  I don't know if the buyers are qualified, but I will ask.



  • September 04 2013
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Profile picture for Suzbo21728
@Tony - it's already priced about as low as we can go, although as the time goes by, we've continued paying down the mortgage so it's not so tight in covering closing costs as it was back in June. 

@Mack - great point and thanks so much for the insight. 

Looks like the majority of the responses from you guys is leaning toward renting, which leads to a boatload of other questions :)

It would be nice to have our condo be an investment property vs. selling it for a loss, because I really do think our neighborhood will get turned around. I just don't want to wait for that time to come. So renting seems to make the most sense. 

As far as getting a lease together and any other necessary documents, do you guys have any suggestions on sites that could help or would my Realtor be privy to that and maybe I should ask her!?
  • September 04 2013
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Do you have it listed with a broker?
Do you have the appropriate Market Analysis within 1/2 mile of the location?
Is it staged correctly.
Are the prospective owners coming to see the home qualified buyers?
Its one thing to get traffic, but if the traffic cant really purchase, what a waste of time...

Let me know

Thanks
  • September 04 2013
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Profile picture for Andrew Malak
Rent, rent, rent !!!!!
  • September 04 2013
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Profile picture for Pinyo B
@user8620981 - If you are planning to rent your new place, then I suggest exploring the renting out your condo option.
  • September 04 2013
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I would rent, but I am bullish on real estate.

If you think it's an up-and-coming neighborhood and that the value will increase, you can probably rent and come very close to breaking even. Your accountant can advise you better, but you'd maintain most of the tax advantages of home ownership and may be able to deduct any cash-flow losses as well.

If you don't have an accountant, I think it's worthwhile talking to one now.

All the best,
  • September 04 2013
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Profile picture for Tony Mitidiero
I believe you should try to get your price as low as you possibly can while being able to cover the closing costs.  If you are not able to cover the closing costs it would be considered a short sale, but this is not something you want to try to do at the last minute.  If you are going to pursue a short sale you should talk to your agent about whether or not you would even qualify for one.  This would be a much longer road to go down and should be addressed immediately if you think it could be the case.  If you are not forced to sell as a result of financial hardship, marital change, etc. your lender will most-likely be not too keen on allowing a short sale just because you 'want' to move. 
You should think about the impact to your credit and your overall financial profile. 
Ask your agent what price it will take to sell the condo in 30 days.  If this is too far off and you truly don't have or have access to the money you'd need to make it happen and you are still set on moving by a specific time, renting sounds like your only viable option.  The rental market is strong and a lender should be able to back the mortgage payment out of your debt to income ratios after you've had a renter paying you for 12 months.  Therefore you should then be able to qualify to purchase something without the condo being used against you. 
  • September 04 2013
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Profile picture for Suzbo21728
@Pinyo - no, we're not planning to buy a place when we move. Don't want to take a chance on buying because we could end up in the same spot we're in, and we really don't have enough in savings for a down payment at this point.  If we were to rent our place, we probably could buy sooner rather than later given I wouldn't have to use my savings to cover closing costs if we were to sell instead... 

@Tony - yeah, thinking it's time to talk to our Realtor. I don't really want to drop the price, but I don't really want to stay here much longer. Question - if we drop the price, it's going to be super tight in trying to pay off closing costs, what happens if you don't have the funds to cover those? Is it now considered a short sale? Just curious how that works. I'm a first time seller so this is all new to me. 
  • September 04 2013
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Profile picture for Pinyo B
A couple of things to consider.

1. What's the comparable rental rate for your condo? If you can rent it out and be cash flow positive (e.g., rent - expenses - deb services) leave you with money in the bank AND you're not to far to manage the property (or can afford to pay ~10% of gross rent in property management fee and still be cash flow positive), then renting is a possibility. I would not rent out the condo, if it's not cash flow positive.

2. Are you looking to buy another house when you moved? If you do and you don't have enough money/income, then renting might be out of the question. OR you can rent your new place and rent out your condo (if it is cash flow positive).
  • September 04 2013
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Profile picture for Tony Mitidiero
I have a tendency to agree with John Wilt.  There is little evidence that clearly argues for values to either go up or down by next year, but there is a plethora of it that argues interest rates should go up.  Right now the Fed is trying to get out of purchasing mortgage backed securities and pushing for a private secondary to develop.  Meanwhile the lending community is continuing to digest the new rules, regulations, and costs associated with implementing Dodd Frank (the 'Wall Street reform' bill).  Many of us believe a private secondary cannot develop in these conditions unless rates increase.  If/when they increase it will have some cooling effect on buyer activity; thus limiting the amount of available buyers for your condo. 
Right now it is clear the market is relatively strong if you're competitive in price.   You may really want to consider coming up with some way to take the hit now and move on about your life. 
  • September 04 2013
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Well, the market clearly has changed and to the benefit of the seller most of the time yet in can vary a lot based on the neighborhood and other factors. You might have a couple of agents do a market analysis to see what value range they come up with. Maybe you are priced too high? Renting is an option if you think you can get a good tenant. My web site has some info on my Listing Programs.
  • September 03 2013
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Profile picture for Suzbo21728
Thanks for the feedback everyone. 

@JohnWilt - our place has been on the market for about 10 weeks so the traffic has been decent (I think), but just anxious that no offers have been made. And I've seen other units of the same size close-by, selling for more than the listing price we're asking for. 

Just frustrated about the whole situation and trying to figure out what's going to be best for us now and in the long-run. 
  • September 03 2013
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Profile picture for Matt Laricy
Well the market is picking up. Areas are doing better than they were before. However, not all are back at full strength just yet. You may want to rent for the next year or so. Rents are at a high and you can wait for the market to recover more.
  • September 03 2013
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Profile picture for JohnWilt

No one has a crystal ball.  But it would seem like interest rates and even prices would be higher next year.  If you plan on buying you dont want your purchase or your rate to get away from you so, you may want to consider taking a hit on selling.  Ask your Realtor for a new market update for selling AND for renting.  Good luck

  • September 03 2013
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Hello,

I have a client in Fife Lake, Michigan who I referred to a Realtor in the area with the same issue and many people are in the same boat due to the current Market lingering with values not rebounding as quick as other areas in the country. She had on the market for 1.5-2 years b/c she could not afford to go any lower or it would be a short sale. If you have no offers unfortunately the buyers are not willing to pay your asking price right now in today's market. I would suggest renting out your condo until the market picks up, which depending, could be a while. Unless your local realtors think the market is dropping more and more and you are not in a position to rent it out for 2-5 years, then you may need to cut your loses and get out of the property and sell for less. Many people have had to do this, you are not alone. However, if you can wait for market to increase in value, then rent it out picking only the best qualified tenants, screening background and verifying employment. Long term employment is key. Have someone check on the rental every 2 months. I hope this helps.
  • September 03 2013
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Profile picture for JohnWilt
13-14 showing in how long? 2 weeks or 6 months? If you think the market would be stronger next year rent it. However, lets say you have been on the market a long time.  Well, if it sits vacant or you get a bad tenant lowering your price now would look like it was a good idea
  • September 03 2013
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