Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008
Re: Want to buy a new Home but can't sell Current House
[ Edited ]

SonorityGenius wrote:

Short sale will also ruin your credit.. I remember once a broker stated Short Sale is considered as bad as a foreclosure..(not sure at present...)


I would just stay put and wait for equity..... maybe get a HELOC and do an addition on your current home if feasable.


I considered suggesting original poster add on current home, but decided not to make that suggestion for the following reasons:

 

  • Original poster says they don't have equity right now, so HELOC won't be possible until they do have equity
  • In a soft market, the return on investments from improvements to an existing house is not very good. In general, a square foot of space that was part of the original structure will bring more in market value than will a square foot of space that was added later, and in a soft market buyers will be even more reluctant to pay for added-on space.


For similar reasons, I didn't suggest original poster simply take a loss on the house by making an extra principal payment on the mortgage: if original poster had that kind of cash available they would not have posted a request for suggestions.  My suggestion of trying to think outside the box and maximize the space they have was based on the premise that in their position anything requiring lots of cash probably is not feasible.

 

I do have some in-laws who doubled the size of their home a few years ago, but they were in a particular situation where the usual market considerations were not a factor for a number of reasons. First of all, they live in a rural area that never had a boom, so they had no expecation of making money on the project.  Second, for the same reason the cost of adding onto their home was much less than it would bein most places.  Third, this house is on land that has been in the family for over a hundred years and therefore has far more sentimental than economic value for them.  Fourth, they had the cash to build the addition without borrowing any money.  Fifth, they plan on retiring in this place, and therefore do not anticipate selling the place any time soon.

 

Message Edited by MattH on 07-26-2009 08:41 AM
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