FAMILY vs. FINANCE
My dilemma is a house that won’t sell, and the interest on the note is eating me alive.
I own a 2 story 2800 square-foot home built in 1980 that sits on 1.25 fenced acres at the end of a street (wonderful location). The house has 4 bedrooms, 2 ½ baths, Den, Dining Room, Living Room, all new siding, 2 new heating and air conditioning units, all new paint and wallpaper inside etc. In other words, this is really a very nice home and in great condition. I originally listed it for $139,000, and after a year on the market, and NOT ONE OFFER, my realtor suggested I lower the price, so it is now down to $129,000 !!! UNBELIEVABLE !!!. and to date, still NOT ONE OFFER !!! I owe $119,000 on it. This same house in Little Rock, would be a $400,000 spread !!
The problem is that it is in a town of 4800 people, and more people are moving out, than moving in.
My son and his family lives in the house (for free), but I changed my mortgage to an Interest Only Payment when I moved out, thinking it would sell immediately, since it is one of the nicest houses in the town. My payment is $810.00 a month, but then I have Insurance, Taxes etc., so I’m spending a smooth $1000 a month, and getting nothing back for it. As of November 2006, I will have spent $24,000 in interest etc.!!
My rent in the town I live in now, is $1036.00 so you put those two together, and I have my hands full, and am just “burning money” up every month. As for the house that is for sale, there doesn’t seem to be any light at the end of the tunnel, and I am going to just keep on paying this interest.
A very “successful” business friend of mine suggested that first I go out, and buy me a house or a condo in the town I live in now, get all of any major purchases I would need to make bought, and then do a “voluntary repossession” on the house I have for sale. She said that she did that one time, and it never really hurt her credit wise. I know it would have to go on my record, but if I keep paying $1000 a month for who knows how long, this is going to sink me anyway.
Would you have any suggestions for me regarding the Voluntary Repo, or some other direction I might take…??
I have got to get out from under the weight of this….I NEVER ever thought I would still have this house nearly 2 years after moving out of it.
CAN YOU HELP with some suggestion???
Randy
Randy,
If you sell this house, will your son and his family continue to live free?
If he is living in one of the nicest houses in town – FREE – do you think he wants dad to sell that house out from under him? If there are realtors making a living in the area, there has to be a market for properties to support their business. The appearance of a house when shown for sale is a very important factor. Do you think your son shows the house clean and shiny so it has the best chance of being sold (thereby transforming himself from freeloader to “payer”) or is the house shown with two years of hard wear, in shambles, occupied by squatters that that don’t want to move and do everything possible to discourage a sale? Did you ask the realtor how many times the house was shown or the condition when shown?
Voluntary Repossession is a phrase usually applied to automobiles allowed to be reclaimed by lien holders [Read my columns on “voluntary repo;” you will quickly see it “solves nothing.”] “Foreclosure,” in my experience base, has serious impact on credit ratings – not advised. There are exceptions to all generalities. I f someone told you that foreclosure had “never really hurt,” regard that experience as unique not typical. As for buying another house or condo and loading it with all appliances – check with a lawyer to be sure you are judgment-proof before allowing foreclosure.
Suggestions:
Tell your son he must remove himself from the house.
Bring the house to its best marketable appearance.
Employ a competent Realtor that understands all market parameters.
If your son saved all the rent money he would have paid, perhaps he has enough for a down payment on the house, especially at a sacrificial price with no Realtor fee.
Renting the house is another possibility, but has some downsides.
Helping our offspring is a wonderful thing; helping them become parasites is not so good. You have created or allowed a situation that involves family and finance. Moving to the emotional side of the issue, approach your son with a soft style and hard numbers. You, parent-like, allowed the situation; he, childlike, accepted your offer. [Fairness is in the eye of the recipient]
I think your intentions were good, but your judgment was flawed. Dad, bite the emotional bullet; son, get a taste of fiscal reality.
Everybody’s Uncle
