Is it possible to actually lose money if you buy a home and sell it in say three or four years?

Yes, if the market value or property value decreases within that time. or if you failed to upkeep the property ...

Good Luck!

depends on the mortgages, the housing market at the time, and other factors, but usually you will not lose money

Only in "Declining Market". That's not very likely. Memphis, TN is an example of a declining market. Real estate is a very safe investment. However, watch out for high foreslosure neighborhoods. The value of your home may be affected by these.

Of course it is. Prices do not neccessarily just keep going up and up.

Oh yes, I saw it happen in the early 90's. People were hung with houses worth less than the actual mortgage. Yikes! It's hard to remember given how hot the real estate market has been over the past 10yrs. If you can put enough money down and then don't absolutely have to move at some fixed point then you can ride out any down turn in the market.

Absolutely! The market could turn at any time. Housing in the area could have declined or you may have overpaid in the first place. More often than not you will not lose money - but it happens!

Of course it is! Until every available square inch of land has been built on, house prices will continues to drif up and down in loosely definable local cycles, with a general tendency to move up, but there always remains the possibility that any specific single property will lose market value.

Save up and buy the house you actually want, then it won't be an issue!

Yes it is and many are going to learn this the hard way.
http://www.breakingbubble.com/
The code word for losing money is " I have learn a lesson"

Yes, it is. With interest, closing costs and other fees, typically you will lose money unless the worth of the house has increased due to increased property values in the area or improvements to the home unless you bought the house at less than full value. If property values have decreased for any reason you will lose a lot more. Generally it is best to live in a purchased home 5 years or more.

It depends on the market. I know here, prices are finally starting to fall. So if I had bought a house last year at top dollar, the value is going down now because of the market. If you bought a house a few years ago, now is the time to sell before the market goes down any more. But your location and what modifications you make and such matter too.

Absolutely! I am a realtor in Las Vegas and I can tell you that there are hundreds of homes on the market listed for significantly less than people paid for them. Like anything else, the housing market has peaks and valleys. However, over the long run, in most areas, you will not lose money unless some external factor comes into play. For example, a major plant closes or something similar.

The best way to avoid losing money is to be very careful where and what you buy. I always tell my clients to buy a home with selling it in mind. For example, even if you donâ€™t have children, you want to buy in areas with the better school districts. Donâ€™t buy homes that back up on freeways, busy roads, power lines, etc. These factors may not matter to you but they will bother a lot of potential buyers.

Ok, youâ€™ve selected a home. How do you know what to offer? By determining the market value of the home. In this market, you should be paying less than market value. Remember, it does not matter what the current owner paid for the home or what it was appraised for last year. Itâ€™s what it is worth today.

I wrote software to do this and have access to the MLS and other paid databases so I can do this very quickly and can take into account more factors. However, the flowing is more accurate than the CMAâ€™s most agents produce. Note: do not rely upon Zillow or the other on-line sources. They are HIGHLY inaccurate.

To calculate the market value of a home you need to know:
1) What comparable homes sold for in the recent past (less than 6 months)
2) What comparable homes are listed for now

Use Zillow (or any other source) to look for similar homes (same number of bedrooms, same square feet Â± 5%, similar age, pool, within about a 1/2 mile, etc.) sold. Calculate the average $/SqFt (sale price / square feet) for the properties. Multiply this by the homeâ€™s square feet and you have a reasonable estimate based on comparable sales. For example, if the home is 1,500 SqFt and the average you calculate is $180/SqFt, the calculation will be: 1,500 x 180 = $270,000

The next step is to use a site like www.remax.net or www.realtor.com to look at what comparable homes are selling for. Perform a similar calculation to determine your homes price based on for-sales. Remember that this is based on the asking price for these homes; they will actually sell for less.

The lesser of your homeâ€™s price based on comparable sales or for-sales is the most probable price. If the lowest price is the one based on for-sale homes, then prices have decreased in your area and you need to take the following additional step. If not, you are done with the calculation. If for-sales are less, check out what homes are actually selling for vs. the asking price. This number may be something like 95% or 92%; it is very specific to your local area. You can usually estimate this by averaging what several homes sold for in your area vs. what they were listed for. Multiply this times the price based on the for-sale. For example, if you calculated $175/SqFt based on sales and estimated that homes are selling for an average of 95% of the asking price, the calculation would be as follows:
1,500 x $175 x .95 = $249,000.

How do you make such an offer to the seller? I sit down with seller and walk them through how I did the calculations. Step by step. I let them basically work out what their home is worth. Chances are that their agent did not show them this and it will be a shock to them. Take it slow and most will come around. However, if they stick with over market price, go to the next home. How people get in trouble in most situations is overpaying for a home. Let cold hard math be your guide.

Hope this helps.

Eric Fernwood
Eric@ISellLVHomes.com
http://www.iselllvhomes.com/

it's always possible to loose money on a house. It's very hard to predict what the housing market will be like in a few years.

Depends on the housing market and inflation. If the market flops like it has been of late then you could take in huge losses. and if your house value doesnt go up as much as inflation then you lose money or stay even.

the main thing is your location and where the market is heading in that area.

Yes. I almost had that happen to me. After four years I ended up with a profit of $1300. Detroit is a good example of a declining market.

Yes. In fact, typically you wait 5 years to sell a home to at least come out even unless you are in a really tight market. That makes up for all the loan fees as well. Depends on where you live.

yes, anything is possible. depending on inflation and interest rates and what you've done to your home.
No-one can predict what the interest rate are going to be years after you buy your house. High interest rates stops alot of buyers from paying the price you want to sell your house for. Buyers will always try to knock the price down, therefore not providing you with profit.

If you renovate your house, and you spend a few thousand on it, you would like to get all your money back plus abit more.The key is, is to never spend more than 10% on the original price you paid, to fix your house.

For example: you bought your house for $300,000, the most you would spend to renovate the place is 10% of that which is $30,000.
Anything more than 10%, then you're risking a loss.

Not likely, but there are less home buyers right now. It would all depend on what type of loan you have on your house. Most people should be able to break even after about 2 years.

i made on my house 5 years later 23,000

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.024
Copyright (c) 2011 Financial Crisis Tuesday, May 29, 2012 - Terms of use - Privacy Policy