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Trickery thing in the world : Home Loan..

Posted by andriantoangkadirjo85 on March 21, 2011

This time I’m just tempted to discuss this topic again as yesterday I came across an article in Yahoo!Finance which quickly draw my attention !! The article’s titled : Losing Big – $65,000 Big – On Our First Home..

Here’s just the article :

Let me preface this by saying that I never wanted to buy a home. I knew the financial risks, the fact that in most cases you have to stay in a home a long time to even have a chance of making it a profitable investment, and that a home can take a lot of effort and money to maintain. My wife, on the other hand, just couldn’t fathom the idea of not purchasing a house once our son was born even though we had lived together happily in various apartments for almost 10 years. While I tried in vein to explain the many downsides to home ownership, I just couldn’t break through to her, and therefore gave in as any good husband should. Big mistake!

Three years after purchasing our home in the spring of 2008, my wife now sees the light and finds the idea of home ownership as repugnant as I always have. Due to a multitude of reasons and factors, we decided to put our home on the market. It’s now been over a year and we’ve yet to sell, but when we do, we stand to lose a boatload of money. As hard as it is to believe at times, and while the two often correlate, sometimes happiness really is more important than money.

Here’s our story.

Winter 2007

Once I gave in to my wife’s home ownership dreams, I focused on trying to make the best decision possible. We took our time, searching at a point in time in which we felt the market had bottomed (oops!) and during a time of year at which I hoped sellers would be desperate for offers and therefore willing to deal. We got pre-approved for our mortgage and set off on our home search in an area of Chicago’s near west suburbs where property taxes and crime were low, property values seemed reasonable as compared to recent years, and the homes were well-built.

After several months of searching we found a home that met our needs. It appeared to be in good condition and was reasonably priced. After a bit of negotiating we got the buyers down from their initial asking price of $320,000 to $295,000 with a $1,500 credit for a repairs that needed to be made. We were satisfied with the outcome and planned on many long years ahead of us in this happy home.

Winter 2009

Skip ahead two years, and as I mentioned, my wife has learned about the hardships of home ownership (i.e. a garage roof replacement, an awning replacement, a sump-pump system repair, and a laundry list of other repairs and maintenance items). Add to this the fact that the suburb we had selected was not all we thought it was cracked up to be, we have an aging parent in need of our support in another state, and other issues I won’t get into here, and we decided it was time to cut our losses and get on with life.

We contacted the same Realtor with whom we initially purchased the house and had her put it back on the market. She thought she had a potential buyer at $309,000, even in a declining market, so we were willing to let her try it at that price for a little while, even though we thought it was a bit outlandish. Again, big mistake!

Even though we quickly dropped the price to $289,000, I have a feeling we missed out on a bunch of potential buyers who came through in the first few months by being overpriced.

Spring 2011

Skip ahead again to the present. With continued real estate market issues, we now have our home listed at $249,000, a full $45,000 under our purchase price. Now you might be asking yourself why we don’t just take it off the market and wait out this rough patch. It’s a good question, one that I have asked myself a multitude of times, and one that’s hard to answer without a person being in our situation. Let’s just say that being closer to my ailing mother in Washington, our happiness, and the opportunity to be out from under what to us is a heavy burden, is worth the loss, be it a big one. So get ready for the numbers.

Even if we sell our home for the full asking price, which I don’t count on happening in this market, it will be well under the price we paid three years ago.

Loss of $45,000 on price of home
5% Realtor’s commission on $249,000 is $12,450
3% closing costs on $249,000 is $7,470
– Total losses on the sale of the home at its current price would be just under $65,000.

This doesn’t even factor in the increased costs of owning a home as compared with the apartment we were renting for $780 a month with free heat, water and trash. Things like annual property taxes, homeowner’s insurance, increased utilities, repairs and maintenance, interest on our mortgage, and similar costs add additional tens of thousands of dollars to our losses, unless you want to consider them costs of the opportunity to live in a house.

andriantoangkadirjo85 bottom line

– Many…many things happening in this world are certainly tricky things. And actually the human basics are IRRESISTIBLE!! What a correlation!! They’re usually packed in attractive way..such as in the case above, the Realtor might be have told they have buyer with good offer price, or while dealing to sell the property, the Realtor might say that the price is low & good & pushed to close the deal soon as possible. How tricky this is..

– Moreover about the fees..these just something many people don’t always aware, until they found themselves about the fact, that all these fees are also tricky.. I mean you never thought all these fees until bad things happens, and you lost bigload money with all these fees include in.

What an article..! What do you think ? Do you feel the same way ?

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