My New Blog

I hear this comment quite readily when I speak to sellers about selling their home in this market.  Being in the Capital District of NY ( Albany-Schenectady- Troy) we have been quite fortunate not to have experienced the massive highs and lows of the nationwide volatile market place, however, the heyday of the 2005-2008 home values have passed.

But.. what does losing money really mean? Does it mean if you sell your home at a price for less than what you paid for it? That is the consensus among most sellers thinking it must be at sold for AT LEAST for what they paid for it.

Well....maybe not....Considering everyone needs a place to live and no place is free, a certain amount of money needs to be allocated to housing whether it be a mortgage or rent.  For  example:

 I am working with someone right now who bought in 2008 for $240,000. Current market value is about $220,000. "That is a $20,000 loss", I am told.

Considering they have lived in the home for 40 months, the cost per month is really $500.00. No way could they have rented a home like this for $500.00 month.  As importantly, the tax deductions from the mortgage interest and property/school taxes are also adding to their "profit" column helping to remove any perceived loss.

With a detailed explanation of how to "rethink" the math- it made sense to them and they are ready to sell!

So... if you are thinking of selling..don't forget to factor in the "rent factor".