Stay, Sell or Rent? 3 Most Important Factors

Despite all the talk about the sub-prime lending and record numbers of foreclosures, there still remains a population of potential homebuyers with a different dilemma. This able buyer wants to take advantage of the outstanding inventory and price reductions, but either needs to sell or rent their existing home. Here are the key considerations to help get you "off the fence:"

1) Condition & Competitive Price: If you have your home or can get it in pristine condition and price it competitively according to a CURRENT CMA (comparative market analysis), and even with a few thousand dollars subtracted for negotiations you can clear what will satisfy you at closing, then GO! However, if your home is simply in average or below average condition yet you will need a top dollar list/sale price to clear a satisfactory amount at closing, then no need to waste time. Only homes in fabulous condition, priced competitively will sell in this market without drastic price reductions! So, let's talk about renting the place.

2) Rent Options: First of all, check with your mortgage lender to see if you can get a loan for the new home showing a lease of your present home rather than a sale. If so, then ask yourself if you are willing to advertise for, interview and select a tenant, then collect the rents each month and handle occasional repairs during the life of the lease. If yes, great! If not, talk to a realtor who does property management in your area and be prepared to pay a portion of the monthly lease payment (about 10%) or perhaps a flat fee for their services. With either of these options, the good news is that someone else's money is paying the mortgage each month and getting you closer to owning the property free and clear and of course greater equity. However, don't forget that there is always a possibility that your tenant will Not pay or not pay On Time. If you think the potential gains far exceed the risks then GO!

3) Wait Out the Market: If a current CMA indicates that getting the sale price you need is virtually impossible and you absolutely don't have what it takes to be a landlord of any type, then STOP. Sometimes you just have to stay put and wait out the market for it always has and will again change.