One Lump or Two?
A phone call this morning with a frustrated seller inspired this blog entry. She called because she's frustrated with very little activity on her home. The truth is that she isn't ready to take her lumps yet.
Her call got me thinking back to a seller I had in late 2009. He had bought his house at the height of the market, and was underwater on it. After going through his market analysis and explaining to him what the house would bring in the current market, he summed his situation up neatly. He said, "So basically I have to decide if I want to take one lump now or two lumps later."
He bit the bullet, brought some money to the closing table, and got on with his life.
Now here we are in 2011, with two more years of NEGATIVE market growth and the announcement that the housing market has officially entered a double dip. Do you think he's glad he took his one lump and moved on?
The truth is this: If you purchased a home in 2006, 2007, or early 2008 and you absolutely must sell, then you're going to have to decide if you'd like one lump or two. It is sheer folly to think you will recoup what you paid for the house. If you price your home in the hopes of doing so, then you will sit on the market with little activity. You'll continue to make a mortgage payment that's going straight to interest, and be much worse off when you finally decide to take two lumps down the road.
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