play money
Heard a story about a young couple who bought a house. Three years later, they put the house on the market. The listed price is $24,000 higher than what they paid for it. They should be making a $24,000 profit, if they sell for the listing price. But they won’t. Because even though they stayed in the house for only three years, they took out a big home equity loan. They only clear a $600 profit if they sell the house for the listing price. They initially had the house listed $45,000 higher than what they paid for it, but the house only lingered on the market, and they wound up having to cut the profit on their asking price by almost half. Wow. That is just so sad to me. To think, if they just hadn’t taken out the loan on the imagined equity in their home, they’d probably have a nice pretty check right now. Instead, their house is still on the market.
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[...] bottom line was thousands away from what we were willing to pay. They were asking too much. But they had a reason. The realtor informed us that we were dealing with a distressed seller – they really [...]
Sistah Ant,
I can totally relate to this. We bought our house in an estate sale. The owner bought the house in 1982 for $122K; we paid the current rate of $475K (this is Jersey after all). Instead of the three daughters of the owner getting $100 each, they got more like $20K. The owner had taken almost all of the equity out of the house within the last five years. So sad. I’d much rather leave my children with cash than a overpriced luxury car and a boat.
I agree. I was a little embarrassed for the seller of my house, because they had to bring money to closing, when they were supposed to be MAKING money.