Help me figure out if this is a good thing.

[hmd2009]

Hi all,

You may or may not remember me but I've been here a bit, we're the folks who had our house for sale and had bought another house, when the first one flooded, and we were stuck with both houses.

We still own both houses and are paying the mortgages on them, while living almost 2,000 miles away in a rental. the flooded one will not sell and we still haven't figured out what to do with it, but the 2nd one has been on the market since November.

The house has only been shown maybe 2 or 3 times, no bites. Today, the realtor called and he has a couple that he recommended our house to, to RENT. He says he sold their house for them a year ago when they left the area, and they just moved back and were looking for a place to rent.

He thought we could probably get it rented to these folks for $600/month and they'd move out within 30 days if it sells.

My initial thoughts:

- Our mortgage is $650/month, plus taxes and insurance which comes out to just shy of $1k/month. $600 rent, really? I guess its better than the NOTHING we're getting now. However, I get the sinking feeling any money we get would be going right back out in maintenance and fixing things.

- We completely winterized the house. They would have to turn everything back on and de-winterize the place. We're 2000 miles away and cannot do anything maintenance wise or winterize the place again if need be.

- The realtor considers these people a friend. Should I trust this realtor to continue trying to sell it (although I hardly think he has been so far) while his friends live in it? Every day we own this house we're losing money.

I do have the cash to continue paying the mortgage for another year or so. Can anyone think of the pros and cons of such a deal, or should I just continue to pay the mortgage and hope it sells within a year?

This is the listing by the way, these folks would be getting a helluva deal for only $600/month:

Bernard Coury Realty

[disneysteve]

I think you'd be nuts to do that. Right now, the house is costing you $1,000/month. What you need to do is slash the price to whatever it takes to get it sold. It has been on the market for 7 months. That means you've lost $7,000 so far. Perhaps if you had set the price $10,000 lower in November, you might have seen more action. Knock the price down every few weeks until you sell it. That's how we sold my mom's house a couple of years ago. She didn't get what she had hoped, but she got the place sold and it is no longer costing her money to carry it while already living somewhere else.

[hmd2009]

I think you'd be nuts to do that. Right now, the house is costing you $1,000/month. What you need to do is slash the price to whatever it takes to get it sold. It has been on the market for 7 months. That means you've lost $7,000 so far. Perhaps if you had set the price $10,000 lower in November, you might have seen more action. Knock the price down every few weeks until you sell it. That's how we sold my mom's house a couple of years ago. She didn't get what she had hoped, but she got the place sold and it is no longer costing her money to carry it while already living somewhere else.

Steve, we only owned the house for 2 years, we're selling it for $6000 above what we owe on it. The only reason we haven't dropped it is because we need the wiggle room cos no one is going to offer us asking price.

[LivingAlmostLarge]

But the longer you hold onto it, the longer it costs you! If you had sold in November, you'd only be out maybe $1-2k. Now you've already run through the $6k above what you bought it for.

[hmd2009]

But the longer you hold onto it, the longer it costs you! If you had sold in November, you'd only be out maybe $1-2k. Now you've already run through the $6k above what you bought it for.

Well, it is in Maine, and during the long, hard winters nothing sells, ontop of the fact that the housing market was stagnant long before the current recession. Nothing is selling there, drop the price or not. Which is why I'm trying to figure out if the rental situation posed by the realtor might be better, or should we just give up on the house entirely, or what. Trust me, I didn't list it to make a profit, I listed it to sell it, its very cheap.

[disneysteve]

I'd have a couple of concerns with renting. You aren't there to keep an eye on things. It sounds like you wouldn't even be meeting the people renting the house. You'd still be losing money every month. Maybe if the rental income would cover your expenses, it would be worth thinking about. You run the added risk of something going wrong while it is being rented, costing you more money. And having others living there might make selling it more difficult as it wouldn't be staged for potential buyers and you'd have to schedule showings around the renters' schedule. The last thing you need is a potential buyer coming to see the place and finding the renters have the place a mess.

[hmd2009]

I'd have a couple of concerns with renting. You aren't there to keep an eye on things. It sounds like you wouldn't even be meeting the people renting the house. You'd still be losing money every month. Maybe if the rental income would cover your expenses, it would be worth thinking about. You run the added risk of something going wrong while it is being rented, costing you more money. And having others living there might make selling it more difficult as it wouldn't be staged for potential buyers and you'd have to schedule showings around the renters' schedule. The last thing you need is a potential buyer coming to see the place and finding the renters have the place a mess.

Thanks Steve, I value your advice. I agree it could set us up for a headache. We can pay the mortgage for another year no problem, so its probably best to just keep trying to sell.

[disneysteve]

We can pay the mortgage for another year no problem, so its probably best to just keep trying to sell.

Here's what LAL and I are both talking about, though. You are prepared to carry this house for another year if necessary. You are losing $1,000/month, so in a year, you will have lost another $12,000. You've already lost $7,000 since November. I know you want to get the most you can for the place, but the sooner you sell, the better off you'll be. Instead of committing another $12,000 to carrying it longer, drop the price now and improve your chances of selling it sooner. Even in a lousy market, houses will sell at the right price.

What do you plan to do if 12 months from now the house is still on the market and you've then lost $19,000 holding on to it? I'll bet you'll drop the price to try and unload it.

[hmd2009]

Here's what LAL and I are both talking about, though. You are prepared to carry this house for another year if necessary. You are losing $1,000/month, so in a year, you will have lost another $12,000. You've already lost $7,000 since November. I know you want to get the most you can for the place, but the sooner you sell, the better off you'll be. Instead of committing another $12,000 to carrying it longer, drop the price now and improve your chances of selling it sooner. Even in a lousy market, houses will sell at the right price.

What do you plan to do if 12 months from now the house is still on the market and you've then lost $19,000 holding on to it? I'll bet you'll drop the price to try and unload it.

I'll let the bank have it back. I am going to drop the price but nothing is selling. Wish me luck.

[disneysteve]

I'll let the bank have it back. I am going to drop the price but nothing is selling. Wish me luck.

I certainly do wish you luck. I know home inventory has shown signs of recovery so the market seems to be starting to turn, though what matters isn't the national stats but those in your particular location.

[wnlbutterfly]

I would suggest getting a new agent. You hinted that you weren't sure he was trying real hard to sell the house. You are getting that vibe even that far away from the situation, then I think you should go with your instinct and try someone else.

Good Luck

[hmd2009]

Bumping up an old thread -- talked to the realtor today, apparently its only been showed like 3-4 times since its been on the market since last November, no bites. I told him I wanted to drop the price last month but he said offering money towards down payment/closing costs would be better, so we did that. A month and a half later, still nothing.

I think its time to let this house go and put the money towards our huge amount of debt rather than throwing it down the toilet on this stupid house

[disneysteve]

I told him I wanted to drop the price last month but he said offering money towards down payment/closing costs would be better, so we did that.

I'm no real estate pro but I'm not sure I agree with that advice. For the most part, folks find houses today online. They do a search in a certain zip code and a certain price range. If they search for houses between $300,000 and $350,000, they won't find a house priced at $355,000 with the seller paying closing costs.

I think it is best to lower the price to attract more people.

[creditcardfree]

I'd drop to at least $115K, maybe $110K.

I think your realtor needs to take better pictures. Those don't really show the house that well. Use the new pics, even if there is no furniture. Just make sure they are clear. Some of them looked fuzzy. A dog in the photo can be a turn off, too.

Can you change real estate companies? Is this a small town?

[hmd2009]

Hi guys, can't change realtors yet, renewed the contract in March, wish I hadn't but this was the end of winter and I was hoping he'd be able to sell it now that the snow was melting. Obviously not. I'm with him til October of this year. I'm thinking my July payment was my last payment. That'll give me another 3 months to sell it without throwing away money while waiting on the bank to take action. If I do sell it, I'll catch up on the payments. If not, I'll let it go. And then put the money towards paying off our debt.