Profile picture for IsaiahM6

We are comtemplating whether to sell our home now or wait till the housing market improves?

We would like to sell our home, then use the equity from the sale to buy land, start with a basement home, then build our dream log cabin buy paying cash. Does anyone have a clue as to whether we will have a sellers market anytime soon. We are located in Southern Indiana where our sellers market is down about 12%. Thanks for your help!

JR
  • June 13 2011 - Bedford
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Answers (14)

Profile picture for IsaiahM6
Thank you to all those who replied to our question.  We did decide to put our house on the market.  We have had a good number of people to look at it already.  No offers yet but a good number of showings for the short amount of time it's been on the market.
  • July 06 2011
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Couple things, this is really more of a preference thing.  Like what is your favorite color, you would not ask someone what your favorite color is?  Before you consider building anything, have you talked to a lender?  New Build Construction is at an low, not since JFK was sitting President has it been lower.  See if you can get approved for a new build.

If so, then speak with a local agent or Realtor.   See what the recent sold comps show your house would sell for, ask for a CMA.  After that, still up to you if you want to wait and see if it gets better or take, what I assume is a lose and move on.
Best of luck.
Spirit
  • July 06 2011
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Profile picture for sunnyview
Not true Dan. I can totally see the future with my trusty magic 8 ball. Let me put all rational argument about the market trends and interest rates aside and rely on magic instead.

Should this poster sell their home now and build their dream log cabin? Shake...shake...here it comes...

  • July 06 2011
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Profile picture for djh55
The short answer is that nobody can see the future of the home market as evidenced by hundreds of so called market professionals who have predicted the markets over the last several years.  You need to start by talking with lenders and contractors to get a "real price" for your home construction plans and a "real pre-approval" for a new construction loan that can be difficult to get.  Statistics can be helpful when making these big decisions but they can also be dead wrong.  Despite what the media says over and over, people are still buying and selling homes.
  • July 06 2011
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Profile picture for snoopysdad
I would talk to knowledgeable agents in Your area and find out if Your 'plan' fits the current market, as 12% down is what it "Was". All 'news' in real estate is last month's, last quarter's or last Year's info. You need to know where things are locally.....right now.

IF You can sell, pay off any existing mortgage, AND walk away with enough to build the 'basement' version of Your dream home, along with completing a log cabin, paying as You go...DO IT, and DO IT NOW.

Just keep in mind that:
A-Construction to permanent loans are almost impossible to obtain now, and
B-Construction loans, where the project began, but was not 'finished'(the scenario You're laying out here.....exactly in the eyes of a bank) ARE Impossible to obtain (for they view You as a 'flake' who failed to plan ahead, and got in Over His Head...so You truly ARE 'On Your Own'), along with:
C-Construction loans for Log Cabins have ALWAYS been difficult to obtain with only 3-4 lenders NATIONWIDE considering same for loans back in the good old days when they'd loan on anything that didn't move (and some things that did, like DWMH's).

Know Your options, consider them seriously, and realize that there are a plethora of 'hidden costs' in building a home these days.
-HTH
  • July 06 2011
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My feelings are you need to make a descision that is in the best financial sense for your family at this time. If you feel that the current market value for your home is sufficent and you will feel satified why not sell now providing the equity you have in your home and accounts will give you enough to build your dream home? You may never be able to make the land purchase in the future if prices go up and the inventory rises you may be stuck trying to sell that home while the land is gobbled up by other buyers.
 
On the other hand if you have the cash why not buy the land now while the prices are down?  Then use equity from your home providing you can afford the paymentto build your dream home. Once complete sell the old residence.
  • June 28 2011
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Sell now while you still have equity.
  • June 27 2011
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deniskaty - check your original post for an answer to your question.
  • June 25 2011
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Sage advice from Sunnyview.  None of us can predict the market.  Every indicator I've seen is not encouraging.  In some parts of the country it is downright discouraging.  If you can sell your present home and walk away with cash in your pocket now -that is a known quantity.  Next year the cash in your pocket might be less.
  • June 25 2011
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Profile picture for deniskaty

We just bought a house and have the same question about selling our current one. We can afford mortgage and taxes, but do not know what to do with insurance. As our current provider wants to cancel once it learns about second home.  Is there a way to keep house out of been vacant or any advice how to deal with insurance?

  • June 25 2011
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JR, we are not going to see a seller's market any time soon.  They are predicting we won't get to 06' prices until 2023 if ever.  It wasn't a 'natural' market but was manufactured by creating loans that were allowing nearly anyone to qualify for home ownership.  We NEED for prices to stable or remain 'normal'.  I am next to you in Illinois and do have some of Indian on my MLS.  You can contact me and I'll help you find the value in your area.  You can also contact an agent near you.

At the end of the day you are better off to try and sell as you may get less next year.  Just remember that if you are buying to 'retire' THAT property is at an all time low, don't hesitate!  Best of luck!
  • June 15 2011
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It really depends on your urgency.  To me, reasons to sell (or buy) a home you live in are more personal than financial, but finances do play a part for many.  If you are in no rush, finances play a bigger part in your decision. 

Unfortunately no one knows when any market will bottom or improve until it happens and real estate is no exception.  My opinion is that it will definitely improve and I am only guessing when I say within 3-5 years.  It's like the stock market in slow motion.  If I need money for something, I can sell some stock but no doubt some time in the future it will be in a position where I can think I should have waited and another time when I will be glad I sold.

I have had clients when finding out the value of their home last year decided to wait a year.  Their home is worth less now.  If you are both buying and selling in the same market (not waiting to do one of the steps)  the market makes little difference.  What you lose on one side, you make on the other because you home is worth less, but so is the one you would buy. With you building, it may make more difference.

To me, one of the financial reasons to buy or sell now is that interest rates are low and they affect yours and your potential buyers purchasing power.  This in turn affects the likely price you will get.

Low rates and low prices make buying a first or additional home a great time to buy.  Move up buyers don't benefit for the low prices, but the do from the low rates.  For people selling and renting, it's not the best time, but the situation may make it necessary anyway.

Obviously I don't have a definite answer, but hopefully something to think about that may help.
  • June 13 2011
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Profile picture for sunnyview
I would not wait if it were me. Life is short and the market is likely to take some time to come back around to a true seller's market. Besides if you do it now, you'll get a great interest rate on your new loan for a longer term and you can start living your dream sooner.
  • June 13 2011
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Profile picture for rockinblu
We were convinced we were selling at the bottom three years ago. However, we felt it was time to move on to the next chapter of our lives. I've never seriously regretted for one minute our decision.
  • June 13 2011
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