Being Bought out by Commercial Investor. What to do next?

Question

Hi everyone, I got an offer too good to refuse on my house by a developer who plans to build 3 story apartments on the land. Only downside is that buying a house now is so high it's almost not worth the effort it seems. I have a clause allowing 2 months rent free and $1000 a month rent for up to 4 additional months, thinking/hoping house prices will start to come down and buy then.

Any ideas about what to expect from the market in the next 6 months? Is my strategy a good one? Should I maybe rent for a year or 6 more month to find my deal/dream home?

How would you approach this situation?

Thanks for any help or suggestions.

Bill Buzzell · Answer

Thanks for your input guys.

Was hoping you were going to tell me to expect a drop any day now in prices. At least I have 6 months to find a nice place and can jump on it with cash.

Chris Martin · Answer

Have you already committed to the terms? Is this your primary residence? Can you claim the Section 121 exemption on any gains? What does your tax advisor say? Lots of unknowns, but I tend to agree with @Doug Smith given that your town (Perry) is adding population.

"Too good to refuse" usually means you are making the right choice.

Doug Smith · Answer

Housing prices are NOT coming down in the next six months. The problem with selling your home is that you have to find a place to go. Unfortunately, it's more expensive today than it has been in the past, but guess what, it will be more expensive in the future the longer you wait. To illustrate my point, let's look at the last major crash in housing prices. It was the most severe since the Fed has been tracking housing prices. Even if you purchased your home at the very tip-top of the market before they dropped by 19%, if you would have simply paid your mortgage payments, mowed your yard, and stayed in the house for 6 years (you had to live somewhere during that time), you would have made money on your home...and that was the worst drop recorded. My advice, you've already contracted to sell, so your committed. Suck it up and buy a house. Most likely it will be more expensive in the future. Good luck!