I awoke to a rancid smell in my house. It smelled like someone had pooped their pants but the kids were fast asleep, no toilets were backed up, and the pets were all outside. I went crazy trying to find the source! I was finally able to isolate it to the kitchen - game hens that I had taken down on Thursday AM but never found the time (or energy) to cook. I was going to rotisserie them this morning but that's out the door - literally and figuratively. But, my house smells so much better.
It's official. I'm old. First, a single gray hair. Now, NPR. I was flipping through the stations, looking for some early football talk shows and happened upon this guy. I've never listened to him before and I'm not sure I will again. His basic premise: take money out of your home, stick it in your bank account and wait. Wait for the housing market to tank in '07 and buy up all the foreclosures and short sales you can afford. Sounds like good advice but is it really prudent?
I am a big advocate of leaving equity alone for fear of being upside-down on my most important asset. What if I need to sell in a hurry? A home equity loan or line of credit can make that a very difficult financial move. Suddenly, I must sell my house for (possibly) more than it's worth. Dicey, indeed.
We all know that mortgage lenders make equity loans largely on speculation; the real temperature of the Denver housing market is cooling and correcting itself with every passing month, yet people are still able to take money out of their homes. They are still accepting lenders' assessments that their homestead is worth far more than they paid. Wishful thinking or stupidity? Possibly a bit of both.
I know our house is worth more than we paid. I know this because I did careful research of comparable properties prior to purchasing and we paid a fair, below market rate. We had an eager seller, who like us when we sold our last home, was already under contract to purchase another property. Paying two mortgage is painful. I've done it and I really don't recommend it because it can be financial suicide, plus it creates a stronger bargaining position for a buyer (caveat: vacation property is an entirely different animal and, in my opinion, a reason to shoulder two mortgages).
Sure, Realtors aren't supposed to disclose seller information, but they want your house to sell and not necessarily for top dollar, so they "share" with the buyer's agent. I know ours disclosed information, against our wishes, which is part of the reason we will never use - or recommend - her as a realtor again. Bitch.
Still, if our local housing market is in a nose dive, which is expected to last through the next year, then maybe we ought to take a little bit of a risk. According to Zillow, our house is worth $350k. That's ambitious, but not far off from the figure I have in my mind based on comps and the improvements we've made. We paid much less, so we are sitting on a nice chunk of equity. We could pull some money out and park it in our savings account. Then, we could use some money to help my mother purchase a place when she moves out here next month. Or, we could use some of the money as a down payment on our next home, then lease this home to my mother. Decisions, decisions.