Should I sell now that lost 1 income....

chrisk327May 18, 2009

So we listed in April. Found buyer rather quickly for our house. The 2-3 houses we were seriously interested in fell through, either went to contract before we were able to move, or lost to another bidder. All the houses that looked like good possibilities online before listing were in contract and now closed. Inventory is out there but it seems like complete crap on the market, or terribly overpriced.

So here we are about a month later, inspections are done on my house, we finally got the buyer back where we started as far as price. And I find out my wife is unemployed in a month due to low enrollment. She's a teacher on Long Island, probably the hardest teaching job market there is, very little hope that she'll get a job for next year. Although she is not the primary breadwinner, her salary is significant to our budget.

Should we go through with the sale and trade up to a larger house, that we can't seem to find? We thought to do this as we saw some good options out there, and thought we could get a good price on them, good mortgage rate, Opportunity! However, we don't need the larger house just yet.

Staying would involve belt tighting. Moving up would involve more than that about $500 more monthly plus about $15K in closing costs.

After laying it out in black and white instead of just talking about it, this post seems like a waste of space. Its pretty clear what I should be doing, it just we had this idea in our head and had our mind set on moving etc, and seems we did all this work to get to this point and weÂre going to have to pull the plug.

RE is telling us we should send out contracts, etc keep the deal moving, you donÂt really have an obligation until they come back and you sign themÂÂÂ IÂm sitting here thinkingÂ.. I donÂt want to spend the $1500 for the lawyer so I can sit on things another weekÂ.

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I can imagine how frustrating it is to have something set in your mind and then have things change. Perhaps you can use this opportunity to buy something with a LOWER payment. I know it's hard to downsize but it may make sense from a financial standpoint. Why were you looking to buy a larger house?

    Bookmark   May 18, 2009 at 12:33PM
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Is your job really stable? Do you want to move for more space/home office/ Children? Neighborhood? Family?
Could you relocate to another area in NY? Could she get another job either their, surrounding states? I know here teachers are hard to find, ND but we do have much lower wages, less stress etc. Yes it is cold.
If you sold, could you rent and downsize your stuff? Make a list pros-cons on these along with other points and I am sure you will find a solution.

    Bookmark   May 18, 2009 at 3:28PM
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Unless we buy a co-op, rent or buy in a less than nice area, we're not going to be saving by selling.

We were planning on starting a family and the larger house made sense. looking for a garage, basement, quieter street, nicer backyard.

Currently we're in a 2br 1 bath house about 1000sqft.

My job is sort of stable. we had layoffs, but think the firm is sized right for now. She doesn't want to move away from family, so we're not planning on moving far if we do, which is the catch 22 on her job. Funny thing is that even in low cost of living areas, teachers do better there than private school teachers like her. I do envy those in the lower cost of living areas, yeah the pay is less, but it seems that you really can have decent homes on one income.

Unless something changes quickly we're just going to stay. I can swing what we have now. surpisingly we made it by living there making half what we do now, although things were tight then.

    Bookmark   May 18, 2009 at 4:35PM
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Sorry about your luck....but this is a bad economy and we all must adjust as best we can. I certainly would not be trying to "buy-up" in your situation. If you are dead set on staying in your location, your best bet is to stay where you are if you can afford that on one salary. Maybe she can substitute or find something to help with the income. You said you want to start a family.....would your wife be working then? you have any idea just how expensive it is to have children, especially if you have to have day care for them?...and all that comes with them? Maybe your family plans are best put off until you can save more money to be able to live on just one salary. Good Luck....and I hope all works out in your favor.

    Bookmark   May 18, 2009 at 5:20PM
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Why don't you rent for a year, invest the money from the sale (something safe)? Not having the expense of paying for a house would allow you to save more money and give your wife time to find another job.

You never know, having more time to work things out might present opportunities you wouldn't have being tied to a house and all the expenses involved.

Just a thought...

    Bookmark   May 19, 2009 at 12:56AM
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How is renting gonna save them money? Rent is pretty much the same cost as a mortgage nowadays.
Unless I read your original post incorrectly, your current home is under contract with a Buyer. If you break the deal now for simply changing your mind, the Buyers could sue for Specific Performance. I do not know if a spouse losing a job is a good enough legal reason that a Judge would throw it out.
Your closing costs should not be anywhere near $15000, unless you are including your downpayment.
You are in a tight spot... interest payments have nowhere to go but up from here.

    Bookmark   May 19, 2009 at 7:03AM
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I don't think rent will save much financially, some but not much if you factor in the tax effect of everything.

To clarify, I'm not in dire straights, Unless i really screw up or lose my job too, my house isn't in danger. I'll just have to control the budget more.

current home is at the point right before contract, so no penelty there.

unfortunately, closing costs by me run around that. to purchase my current house the cost of everything was about $14K. that did include setting up the escrow account, but actual fees were in the $10K range. Thats not counting a downpayment. Basically its a feeding frenzy for everyone involved from the lawyers, to the county, title insurance, etc etc

yeah, I know it costs money to have children. when we started this plan, we figured that her salary would cover some of the transaction costs, and the increased mortgage for a little bit. Still doable to have the kids, but not the bigger house just yet.

maybe at some point we'll move outside the area and actually get a big house, seems easier everywhere else.

    Bookmark   May 19, 2009 at 12:13PM
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When you say closing costs, you mean the closing costs involved with buying a home? When we purchased our home a couple months ago our closing costs (up to $15k) were covered by the seller. It seems that's the case with most foreclosures (at least in my neighborhood)! Have you been looking at foreclosures much?

    Bookmark   May 19, 2009 at 3:21PM
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even if renting didn't save you money, would it be a way of "treading water" for a year, w/ the house proceeds banked (and no money lost to breaking the contract?)

what *is* up w/ the sale of your current house?

    Bookmark   May 19, 2009 at 11:30PM
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Here's another thought: Without your wife's income would you be able to get the bigger mortgage you seek? I'm selling a house and a couple of the lookers are people who need to rent-to-own because they've sold and have found out that they don't qualify for a mortgage now (these ones had poorer credit than they thought). But you could find yourself with a house sold...and no where to go.

I'd sit tight if I were in your shoes.

    Bookmark   May 20, 2009 at 10:25AM
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Stay put. If you want to start your family soon and your wife will be out of work, now might be the time to do so. You will be a little cramped, but it is doable. When the economy picks up, she can look for work if she wants a job, and then you can afford a bigger house. In the states where I have lived, public school teachers make more salary than private school teachers. If she needs some courses to make herself attractive to the public schools, she might also use this time to enroll and earn the credits so that she can contribute more to the purchase of that bigger house some day.

    Bookmark   June 12, 2009 at 11:41PM
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we decided to stay put and take the house off the market.

unfortunately getting a public school teaching job here is more who you know than what... she has 5 years experience, and a masters degree. She's looking at getting additional certifications.

    Bookmark   June 15, 2009 at 12:59PM
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