A cash offer on our house - what to do?

[Mr Ed]

Hi,

Our house isn't for sale but a person we know wants to buy it. She is a cash buyer. We would end up with a bit more than 100K in the bank. We have been thinking about selling for years as this was meant to be a 'starter' house, but we never got around to it. The location is perfect for us right now, the house is lovely, but a bit small.

If we sold, we plan to rent for a while and 'think' about what the next move would be (rent would be less than what we're currently paying on our mortgage)... but we have no firm plans. We would invest a large portion of the money in shares and hope to make a small fortune on them

Is it a good idea to sell now and make a bit of money? I guess we would end up buying something eventually but houses we like are around the 500K mark still. We paid 200K for our own 5 years ago (mortgage currently at 130K) so even buying at 300K would be a HUGE jump on our mortgage repayments. Should we just rent forever??

The advantages (we think) of selling now would be flexibility, no debts, the possibility of getting a great house for a good price i.e. money in the bank for investment in the hope that we could put a LARGE deposit on a big house in the future.

Sorry for this waffly mail. We are at a loss as to what to do. Another reason we are thinking of leaving is that our estate is becoming full of renters and a lot of the other families are talking of moving on, and I'd prefer to live somewhere that felt more 'settled'...

We really don't know what's best. If anyone has any advice, please help! If we don't make a decision now will we be talking about moving onwards and upwards for the rest of our lives...? (Probably!). Should I just be happy with what we have?

Thanks,

Mr Ed

 

[lulu1]

location perfect but house is too small - for larger house you may need to compromise on the location - but that's never a good idea.

You probably have 18 months before economy might change - in that time you're best bet is to determine the motivation of any seller - the more motivated they are to sell the more likely you are to get a great price. My advice is sell, rent bank the money in two separate 50K accounts DO NOT INVEST IT and wait - you seem to know what you want in terms of location and space but be prepared to compromise on other things and you could get a great deal.

 

[Senna]

If your house was worth 200k in 2004, and you can sell now for 230k, then that sounds like a great deal. Evidence is advertised prices are around the 2004/2005 level, but actual sale price is lower, so you would be getting a good price in the current market.

The most important point is that the house is too small for your needs, this will be more of a problem as time goes on and when it finally comes to a head, the market could be much lower than now and at a time when you have to sell, you could get much much less.

To me it sounds like a no brainer, take the money and run.




p.s. put the money into a bank and DO NOT INVEST IT, if its money you can afford to loss, then invest it. But if you need it for your next home, then put it somewhere safe.

 

[extopia]

The fact that you're asking the question means you're not committed to your current house. Good price offered? You should definitely consider the sale.

What you do with the money is irrelevant, really. (But don't blow it )

 

[Mr Ed]

Wow interesting replies, thanks. I don't have a clue about shares or anything like that but I thought it would be a good time to buy when things are so bad??!! Seems not!

Good to get objective answers. Keep 'em coming... thanks!!

 

[Bank Manager]

Mr Ed,

Just another angle to think about .....

The location is perfect for us right now, the house is lovely, but a bit small.

Have you considered extending current property (if it's feasible to do so) - may be worth looking at what you could do to extend current space and have same costed (even at a high level) - compare that to a move with all its associated ancilliary costs, e.g. stamp duty and legal fees etc ...

As I say may be something to consider ..

Best of luck ...


BM

 

[MelF]

Bite their hands off - €100k profit in this climate? Happy days!!!!
Good luck OP, it's a lovely position to be in.

 

[Mr Ed]

Yes, funnily we were right in the middle of getting quotes for an extension and attic conversion, which were running at about half the cost that we were quoted 1/2 years ago.

Still pondering.

 

[twofor1]

Hi,


Is it a good idea to sell now and make a bit of money? I guess we would end up buying something eventually but houses we like are around the 500K



Mr Ed

I would not sell now unless I was buying my bigger home now.

You might get your new home cheaper in the future but your circumstances could change in so many ways, job losses, pay cuts, children, health issues, to name but a few. Even with your €100K deposit can you be sure your bank will fund you for your ideal home in the future.

 

[Kine]

I don't have a clue about shares or anything like that but I thought it would be a good time to buy when things are so bad??!! Seems not!

It's people like you who invest, knowing very little, that will get screwed. Investing in shares is a full-time job, you can't just half assedly do it (of course you could get lucky...). I wouldn't risk my nest egg on something I have no idea about....you'd be better off going to the horses.