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Message
House Advice
Posted on 2/1/09 at 6:56 am
Posted on 2/1/09 at 6:56 am
I posted this whole story on the OT yesterday a little in jest but it has become more serious. Long story short: I get a message on my ansering machine yesterday from a guy stating that he would like to buy my house. I haved lived in current house since december of 06 and it is not for sale. For shittes and giggles I call him back and he offers me 1.5x what I paid for the house in 2006. I told him that I would have to think about it. He said that he will have an offer in writting early next week. Both the wife and I really like the house and do not want to move. But is it stupid to turn down this kind of money in the current market?
5
Posted on 2/1/09 at 7:13 am to threeputt
quote:
But is it stupid to turn down this kind of money in the current market?
No.
If you like the house and aren't interested in selling the house, don't.
Posted on 2/1/09 at 7:14 am to threeputt
Is he paying cash?
Posted on 2/1/09 at 8:13 am to Ziggy
quote:
Is he paying cash?
The message said he would pay cash. He never mentioned method of payemnt on the phone when I talked to him. Why would that make a difference to me?
Posted on 2/1/09 at 8:33 am to threeputt
I wish this sort of thing would happen to me. I'd sell it, then live in a rental house for a year while looking for another house that you love/fits all of your needs to buy for cheap (if he's paying cash)
Posted on 2/1/09 at 9:33 am to Ric Flair
Why does the buyer paying cash make a difference to me? How does it affect me if he personally gives me the funds or if he gets the funds from some bank and then gives me the funds? I am confused?
Posted on 2/1/09 at 10:14 am to threeputt
Sell the house if the going market in your neighborhood is dropping. Up the price 12-15 thousand. Put profits in a savings for a year or two. Use the 12-15 thou to rent for that time. Job losses and foreclosures are coming and you may pick up a sweet deal from a bank. You have to think about kids, schools, and did you expect to stay in this house long-term when you purchased it? What will make momma happy?
Posted on 2/1/09 at 10:23 am to threeputt
quote:Obviously a better measure is how much markup are you getting compared to what the house is worth now. Did you get a really good deal when you bought? Has the value changed much in the last 26 months(upgrades, falling values, etc.)?
I call him back and he offers me 1.5x what I paid for the house in 2006.
Also a biggie, is you house on top of a gold mine? See if any neighbors got similar offers, he may know something you don't. If his occupation is business related, then consider this more closely.
In the end, I would probably jump on that offer given similar circumstances.
Posted on 2/1/09 at 11:30 am to eelsuee
quote:I think I would jump on it too. That is a real stroke of good fortune.
Obviously a better measure is how much markup are you getting compared to what the house is worth now. Did you get a really good deal when you bought? Has the value changed much in the last 26 months(upgrades, falling values, etc.)?
Also a biggie, is you house on top of a gold mine? See if any neighbors got similar offers, he may know something you don't. If his occupation is business related, then consider this more closely.
In the end, I would probably jump on that offer given similar circumstances.
Posted on 2/1/09 at 12:45 pm to threeputt
quote:
Why does the buyer paying cash make a difference to me? How does it affect me if he personally gives me the funds or if he gets the funds from some bank and then gives me the funds? I am confused?
The only reason I can think of (and it's a big one) is that if he gets a loan to buy your house from you the odds are that the appraisal wouldn't come in at 1.5 times what you paid for it in 2006. Banks loan money on the 'value' of the home as determined by an appraisal or sales price, whichever is less. So even if he offered you 10 million dollars for the house, if it appraised at $100K, a bank would base their loan to value off of $100K. If the guy is paying cash, this wouldn't matter at all.
Posted on 2/1/09 at 12:53 pm to MikeBRLA
quote:
The only reason I can think of (and it's a big one) is that if he gets a loan to buy your house from you the odds are that the appraisal wouldn't come in at 1.5 times what you paid for it in 2006. Banks loan money on the 'value' of the home as determined by an appraisal or sales price, whichever is less. So even if he offered you 10 million dollars for the house, if it appraised at $100K, a bank would base their loan to value off of $100K. If the guy is paying cash, this wouldn't matter at all.
This is precisely the reason I asked.
Posted on 2/1/09 at 1:15 pm to Herb
quote:
That is a real stroke of good fortune.
Of course you will have to account for the money on your taxes as "windfall profit."
Posted on 2/1/09 at 2:33 pm to C
quote:
Of course you will have to account for the money on your taxes as "windfall profit."
I thought that capital gain from your primary residence is tax free up to 500k. So I should just be taxed on the difference bewteen the sale price and 500k, correct?
Posted on 2/1/09 at 4:46 pm to threeputt
quote:
So I should just be taxed on the difference bewteen the sale price and 500k, correct?
You are correct, I was just joking about the whole windfall profit taxes that politians threaten on "overly" successful investments.
Posted on 2/1/09 at 8:08 pm to C
I think if you resided ther for over 2 yrs. you are tax exempt.
Posted on 2/2/09 at 2:20 pm to Simplemaaan
You are tax exempt if you put that money you gain into another house.
Posted on 2/2/09 at 5:11 pm to Simplemaaan
This is correct, you need to have resided in the house for 2 of the previous 5 years to be exempt. Make sure you have been there a full 2 years.
Posted on 2/2/09 at 5:31 pm to threeputt
I can't put my finger on a particular scam that this guy could pull, but my gut feeling is to be suspicious of this offer.
Posted on 2/2/09 at 5:47 pm to ewilliams20
This actually happened to a friend's neighbor and it wasn't a scam. The guy had just gotten a large settlement in a work injury case. People who aren't used to having alot of money and happen to get alot in the lottery/large settlements tend to do these sorts of things.
I'd sell it, rent something for a year or two, and buy it back from him at half price once he blows the rest of the settlement money and can't afford the upkeep.
I'd sell it, rent something for a year or two, and buy it back from him at half price once he blows the rest of the settlement money and can't afford the upkeep.
Posted on 2/2/09 at 7:21 pm to Ric Flair
Talked to him again today and I actually think he may be legit. I had him on speaker phone today with my atty. He says that he has always wanted to live in the part of town where my house is and he and his wife "are in love with the place". They have a house on the North Shore that was sold last month and are presently renting a place on a monthly contract.
Something still does not sit well with me about this whole deal. I just find it very odd that he is ready to put an offer on paper without ever seeing the inside of the house. I mean, it would awsome to have that kind of money in the bank but the wife really does not want to move. I couldn't really care less where I put my head down at nigh but the wife told me that the only place she would move is a place on a particular street here in the city. Most of those places are huge and have a pretty big price tag. Even with the cash we get from this sale - it would be tough to swing one of those places right now.
The wife and I will discuss it again tmorrow but because my gut says that something is up and her being very high maintance, I think I may just pass on this deal. I just hope that I will not kick myself for doing so in four or five years.
eta: I also hope that Jersey Tiger does not kick my arse when I get the chance to meet him
Something still does not sit well with me about this whole deal. I just find it very odd that he is ready to put an offer on paper without ever seeing the inside of the house. I mean, it would awsome to have that kind of money in the bank but the wife really does not want to move. I couldn't really care less where I put my head down at nigh but the wife told me that the only place she would move is a place on a particular street here in the city. Most of those places are huge and have a pretty big price tag. Even with the cash we get from this sale - it would be tough to swing one of those places right now.
The wife and I will discuss it again tmorrow but because my gut says that something is up and her being very high maintance, I think I may just pass on this deal. I just hope that I will not kick myself for doing so in four or five years.
eta: I also hope that Jersey Tiger does not kick my arse when I get the chance to meet him
This post was edited on 2/2/09 at 7:25 pm
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