Real estate question...kind of

[Mark]

I bought a new home in March/09. It was ready by Sept 09 and i moved my family in. When i purchased the home, the economy was struggling to say the least and i was able to buy it for less then original list price of $469K The final purchase price was $424K (house is 2,300 sq ft). Now my neighbour who moved in just before i did and has an almost identical house put it up for sale. The asking price is $569KI told my wife that i think we should sell the house and bank the over 100+K. She said we have 2 small children and it would be a big hassle. She also takes the view of the home not being an invesment. I want to sell and she doesnt. Thoughts

[mcallister3200]

Haven't posted in like a year, but I'm a MN realtor and think I could help ya here. First, you can't sell without both of you agreeing to it. Takes one to buy, two to sell if married. Second, list price doesn't really mean value, some realtors will pad a price just to get the listing so they can get exposure. You can get a few realtors to do CMA's for ya witthout any obligation. But anyways, I would advise against selling now mainly because you need to have your home registered as a homestead and lived there for at least 2 of the past five years to avoid paying a capital gains tax. If you wait until March '11 or later, you don't pay any tax on capital gains up to 250k. In general, I would also expect it to take until 2013-2015 for the market really to kick back up. I don't necessarily know you're market, but I'd strongly advise to at least wait until you can avoid the capital gains tax. Hope this helps

[ZoomVT]

just because he put it up for sale it doesnt mean it will sell at that price. Also, almost identical is not the same as identical. There a little details that might not mean much when you live in a house, but it means $$$ when assessing a property.

Just for kicks, you should call a reputable real estate agent that is experienced and recognized and have him/her give you a market study on your house.

Once you have the real numbers then look at how much real equity you would have. Then you need to asses if the money you make on that sale is worth finding a new home that you can afford and provides all the amenities you now enjoy. While doing that, account for the cost of closing on the loan and whatever you would have to invest in the new house to make it up to your standard of living.

Dont get me wrong, im all about cashing in an asset if it is truly hitting a peak. But you have to be real careful. Also keep in mind that if you havent lived there for 3 years you will have to pay very heavy taxes on the sale.

[guzzi]

dont sell ...she dont wanna move...if u move sheel kick ur azz...ahl da time too mind u...

[mcallister3200]

Originally Posted by ZoomVT

just because he put it up for sale it doesnt mean it will sell at that price.

Just for kicks, you should call a reputable real estate agent that is experienced and recognized and have him/her give you a market study on your house.

. Also keep in mind that if you havent lived there for 3 years you will have to pay very heavy taxes on the sale.

Pretty much what I was saying. It is 2 of the past 5 years registered as a homestead, not 3and I'm 100% positive on that unless that varies from state to state.

[ZoomVT]

you are probably right since thats your industry. i thought it was 2 consecutive or 3 of the past 5 years.but i have been wrong before.

[mcallister3200]

Yeah I probably didn't need to comment on what you said though since I agree with it, you probably know as much as half the people in my industry haha

[Ron Mexico]

Unless you are in serious financial trouble and have a prequalified buyer for that price. Stay where you are.

The market is just going to get better.

[Mark]

Thank you and appreciate your opinions guys. I dont buy properties to flip for profit as i have a young family and also not my forte. I also realize that just because thats the asking price doesnt mean you'll get that. But even if it sells for much less would still mean at least 100K and i'm having a hard time letting it go. Also we dont pay taxes on any gains made thru property transactions in Canada. Its all tax free

[mcallister3200]

One other thing to consider is that if you're making 100 k profit, you're also likely to pay more for your next home if your market's improved since you bought unless you downgrade.

I always have to point the flipside of that out to people who think they're taking a "loss" on their home.

So if you're gonna do it, I would suggest making any sale contingent on you finding your next home, that way you will know if you're actually going to pocket that profit or end up paying more for your next home.