Selling house

[soc]

Put the house on the market today - the sign just went up (not on myhome yet) and the next door neighbour had spomeone he knew over looking within 2 hours. Totally bizarre - pretty much offered the asking pending the sale of his own house. Who said the property market is dead

[CJ]

Selling your house to fund an RS4 is going a step too far IMO

CJ

[soc]

Selling your house to fund an RS4 is going a step too far IMO

CJ

sssshhhh, she doesn't know yet

Seriously though - we're considering renting for the next 12 months instead of buying - I reckon there'll be minimum 10% drop on average so in theory (even after rent is paid) it should make financial sense.

[mcgon1979]

pretty much offered the asking pending the sale of his own house. Who said the property market is dead

sweet stuff soc. let us know how it goes. My house was on the market for 4 months before getting an offer. We had about 5 or 6 people who wanted to buy it and even asked for the sign to be taken down as they were DEFINITELY taking it (pending the sale of their own house...) You might be lucky though, maybe his house will sell quick. We had to wait for someone fully approved for mortgage to get it, as I guess none of the other interested parties could sell their houses.

[mcgon1979]

Seriously though - we're considering renting for the next 12 months instead of buying - I reckon there'll be minimum 10% drop on average so in theory (even after rent is paid) it should make financial sense.

BTW thats EXACTLY what I am doing. And yes I think(hope) it will make financial sense. houses should come down 8 - 10% and you'll have a bigger selection to choose from in 12 months also.

[soc]

Seriously though - we're considering renting for the next 12 months instead of buying - I reckon there'll be minimum 10% drop on average so in theory (even after rent is paid) it should make financial sense.

BTW thats EXACTLY what I am doing. And yes I think(hope) it will make financial sense. houses should come down 8 - 10% and you'll have a bigger selection to choose from in 12 months also.

We're not in a huge rush to sell - the important thing for us is to complete before prices drop any more

I spoke to some of the traders yesterday and they're advocating a drop of anything between 10% & 30% so either way renting for a year makes a lot of financial sense

[mcgon1979]

excellent. Have not heard somebody else say that yet soc so its good to know Im not alone in my plan to rent for a year. If you mention it to anyone else I get a barrage of "are you THICK!!! dea dmoney etc etc" type comments. no point trying to explain negative equity to them.

[soc]

excellent. Have not heard somebody else say that yet soc so its good to know Im not alone in my plan to rent for a year. If you mention it to anyone else I get a barrage of "are you THICK!!! dea dmoney etc etc" type comments. no point trying to explain negative equity to them.

Yea, it's something we've been thinking of doing for a while now - just wish we'd done it 12 months ago.

[Muad_dib77]

ah sure the market will always be fluctuating. you'll need to to time the selling and the buying very well in order to make maximum profit..

[mcgon1979]

ah sure the market will always be fluctuating. you'll need to to time the selling and the buying very well in order to make maximum profit..

yeah I missed the selling myself by about 12 months for maximum profit.

[stevec]

How does that work out given massive stamp duty - are you planning to buy new after renting?

I would have thought you'd need 12-15% drop to negate the stamp duty loss.

[soc]

Good point stevec - it only really makes sense if you're planning to buy new or if you were planning to move anyway.

We want to trade up from our current 2 bed townhouse to something more family orientated, i.e. semi-d, driveway, garage, etc. So we were planning to sell anyway. The reason we held off last year was because it was obvious the market would drop - I just wish we'd sold and then rented instead. Given we have already made the decision to sell I'm pretty sure prices will be minimum 10% down over the next 12 months so it makes no sense to rent. If we're looking at 700k on a house that'd equate to 70k less next year so even if we rented at the top end (say 2k pm) we would be 50k better off - and that doesn't include any money we can make off the equity we'll release from the house sale.

@Maud - you're right - house prices will fluctuate and I don't believe we'll see a crash like some are predicting but I do believe things will only stabalise after a reasonably significant drop of between 10% & 30% depending on location and type of property. The past 12 months have seen exactly that and there is definitely more to come - there are a lot of indicators of what's to come - no 100% mortgages available, Euribor (inter bank lending rate) is rising, developpers have seriously cut back on planning applications and have slowed down existing developments to slow availabilty, rental proprties are more available - not even getting into external factors. All in all prices do need to come back to more reasonable levels.

[stevec]

We want to trade up from our current 2 bed townhouse to something more family orientated, i.e. semi-d, driveway, garage, etc. So we were planning to sell anyway. The reason we held off last year was because it was obvious the market would drop - I just wish we'd sold and then rented instead. Given we have already made the decision to sell I'm pretty sure prices will be minimum 10% down over the next 12 months so it makes no sense to rent. If we're looking at 700k on a house that'd equate to 70k less next year so even if we rented at the top end (say 2k pm) we would be 50k better off - and that doesn't include any money we can make off the equity we'll release from the house sale.

So in theory:
sell for 700k
rent for a year = 24k
price drops to 630k
stamp duty = 45k
just about break even - although you'd have saved what you were paying in mortgage interest over a year.

It's a bit of a gamble unless, as you say, you're moving anyway.

[soc]

So in theory:
sell for 700k
rent for a year = 24k
price drops to 630k
stamp duty = 45k
just about break even - although you'd have saved what you were paying in mortgage interest over a year.

It's a bit of a gamble unless, as you say, you're moving anyway.

Only worth it if you're moving anyway which changes the picture totally -

Assume a new house price in March 2008 of 750k in Mar 2008. That equates to 43k stamp so the total cost in March 2008 is 793k.

Now assume a (modest) 10% drop over the coming 12 months so your 750k house is now 675k. the stamp has also dropped to 38.5k. The new total cost is 713.5k. So (assuming you were planning to move anyway) if you wait 12 months before buying you should be 80k euro better off.

That also doesn't factor in the interest you could earn on any equity you take our of your current house - and it only assumes a modest 10% drop in prices. Our place dropped 14% in the past 8 months and I believe this is just the start really.....

Btw, I've deliberately ignored the cost of renting as what you'd pay would also be a mortgage repayment (if you buy striaght away) and that would be mostly interest so the loss (when you work out what you've actually paid off your principle) would probably be small enough (I'm too lazy to work it out tbh). - narrow minded I know but even if you do take the cost of renting away you'd be 55k up

[stevec]

Ah, the figures make more sense when you work out the correct stamp duty - doh

I forgot the first 125k was exempt

Hope it works out for you.

[Muad_dib77]

I know it makes sense - but I just don't know if I'd have the gusto to do it.. I enjoy owning my house, and not paying off somebody elses mortgage..

..if anything I'd be inclided to move further away from "the big schmoke" (or anyother larger highprice city) to avoid some of the worst fluctuations..

[soc]

I know it makes sense - but I just don't know if I'd have the gusto to do it.. I enjoy owning my house, and not paying off somebody elses mortgage..

I hear ya - believe me I'm still struggling with the idea but in my head I'm sure it makes financial sense

..if anything I'd be inclided to move further away from "the big schmoke" (or anyother larger highprice city) to avoid some of the worst fluctuations..

Not a bad idea tbh - MfFTO said it before - you generally get a better quality of life outside Dublin. And I'd buy the theory that Dublin prices will take a much bigger hit than most other areas - particularly the commuter belt unfortuantely. But I also think those houses at the higher end of the scale will be hit hard as they really were in fantasy land the past few years.