To Sell or Not To Sell? Here Are Questions to Help!

Written by: Tom Brown

Many people in Chicago are ready to sell their current homes and move on, but a home sale in this current real estate climate is, shall we say, not ideal.  If you are struggling with what to do with your current Chicago home, then the answers to these questions might help you navigate your situation:

1.  On paper, how much of a mortgage can you afford for a new home if you do NOT sell your current home?  

  • On paper, the bank is not going to count rental income on your current home until you have two years of rental history.
  • If you answer is 'not enough' to buy the home you want, then check out schoolsparrow.com where you can find real estate that you can afford in Chicago neighborhoods with high performing schools

2.  Is it better for you financially to take the hit and sell now, or rent your property out and sell later?

  • Your realtor can help you determine a likely sale and rental price for your home in today's market.
  • If it is better for you to sell now, but you can't move forward because you do not have the cash to write a check at closing, then it might be tempting to consider a short-sale.  Consult an attorney if you want to explore this route.

3.  How much of a mortgage could you afford in two years if you become a landlord and a renter?

  • If you go this route, the lender will use tax returns to determine your rental income, so make sure your report every penny of rent!
  • This exercise will help you determine the rental rate you can afford to pay since the rent you pay impacts your down payment savings.

4.  Are you willing to become a landlord and a renter?

  • Many people feel that moving from home ownership to renting is a step backward.  Remember, it is only temporary and part of a plan to get to a better place!
  • If you need the rental income to qualify for the home you want, then this might be motivation enough to become a landlord and a renter for two years.
  • You can decrease landlord risk by utilizing real estate professionals to screen tenants and process leases.

Many people are on the sidelines waiting to see what happens with the market before making a decision on what to do with their current home. Finding the answers to these questions could help you discover a path that will get you into a home and location that works better for your family.

 *Email admin@schoolsparrow.com to request a spreadsheet that should help answer some of these questions.

Posted on September 21, 2012 at 9:56 AM