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chris82715
Join Date: Feb 2002
Posts: 16 Four Corners, WY
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2002-11-28          45494


We (as in my lovely Wife & I) have found the perfect ranch that we want to retire to,(sort of, from the mad rush of things anyway) and we are starting to look at some other options and wanting ideas. The deal is we have a nice home and 15 acres of ag zoned property in the foothills west of Denver worth M/L $800,000 as appraised, and we owe $250,000 on it. The property is divided into two parcels with the house & 4 acres + 11 acres a separate building site. We have a contract on the ranch for $370,000 contingent on the sale of our place, but we have had a lot of showings and no buyers. We cannot afford an increase in payments but we have been searching for 3 years for what we want and the contract expires soon. does ANYBODY have any ideas!!!!!



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Art White
Join Date: Jan 2000
Posts: 6898 Waterville New York
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2002-12-02          45619


Being a sales person this is tough to answer and I've only passed thru Missouri. I've seen many places listed by a realter that are out of there league or they don't handle that style of house or customer and they just sit. Sometimes it is the property is over priced to those that are shown it. But then to the right individual it isn't seen or shown because of the marketing used or the realtor. No matter how good of a buy it is, if you don't have the people that are looking for that type of product, it won't sell. Take a look at the market for comparables and who has them listed and see how there sales are. ....


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mikefitts
Join Date: Jul 2003
Posts: 12 South Al., North West Fl.
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2003-05-23          55402


I am in the process of selling a piece of property by allowing the buyer to lease purchase. It's simple,search the net for "lease purchase" for info. In my situation, my wife and I were transfered and HAD to move, quick. Another plus is, not paying an agent 7%. (No offence relestate people) ....


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Murf
Join Date: Dec 1999
Posts: 7249 Toronto Area, Ontario, Canada
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2003-05-23          55410


Chris, it sounds like one of those 'beauty is in the eye of the beholder' situations.

You say that your place is 'worth' $800,000 and that you have $250,000 in mortgage against it, meaning you have $550,000 'worth' of your money in the house. But, I assume you bought it for much less than $800k. That being the case, the $550k. of your 'money' that is in that house is not cash, it is only equity, if the real estate market were to go down, so would the $550k. of equity.

The way I see it, you have two main choices;

1) Discount the capital gains you have made on that house to get it sold NOW, as long as you sell it for more than you paid, you are still 'up' on the deal, just not by as much as you MIGHT have been.

2) Go to your banker, if you have $550k. in equity the will probably "Bridge Finance" the other property for you. The way this works is your bank gives you the money to buy the other place, adds a second mortgage to your existing place but just charges you interest-only payments till it sells, the interest on it will probably be about the same as the rent you would get from renting one of them out till a sale happens, some banks will also let the interest just accumulate, and you make on payments at all, the balance just gets bigger until you sell and pay it off.

Choice 2 is better for you if you think you can sell for close to you price, it will just take a little while. The deciding factor is purely economics, the interest ($375k. will cost about $20k. a year) over the time involved, versus the discount to sell. For example, if it took two years to sell, it would be $40k. in interest, if you had to discount to sell now but had to reduce by more than $40k. then you would be better off to leave the house mepty & for sale for 2 years. If you rented the new house out and used the rent to offset the payments on the increased mortgage, it would cost you almost nothing in the end, especially if you sell for close to your target price.

Sorry for the length folks, economics can be tough to explain succinctly.

Best of luck.
....


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AC5ZO
Join Date: Jul 2003
Posts: 928 Rio Rancho, NM 87144
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2003-05-23          55422


I was involved in a similar situation recently.

I bought the new place before listing the old place. I used my equity and credit to finance the deal, and got an agreement for a free reammortization of the loan once I had all of my equity out of the old property. Reammortization lets you pay additional equity into the property to lower the payments (a type of refinancing), but deciding to do so depends on need, interest rates and a host of other things.

Having both places at the same time made moving my machine shop and other equipment easier, too, because I could work at my pace and each item had a new location rather than having the whole mess dumped on the new place and working for months to get everyting sorted out.

I listed the old place a couple of weeks ago and I have had a lot of traffic already. I priced my property at $449K but there are two neighbors around that have theirs priced at $800K and $1.2M respectively. The $800K place has a slightly better view, but it is not worth 300K more. The $1.2M place sold in bankruptcy court for $500K only two years ago and the new owners "fixed it up." I do not think that they put even $300K in improvements. Both of these other properties have been on the market for months because the owners want top dollar and are being unrealistic.

People looking at my place think that they are getting a bargain because there are so many high priced listings nearby. The price for my house was established by the sale prices of other similar houses. That price was consistent with improvements that I had made on the land.

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Chief
Join Date: Jul 2003
Posts: 4297 Southwest MiddleTennessee
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2005-10-02          117244


Chris,

Kinda late posting to this thread. Just curious as to the outcome of your real estate swap? ....


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