I've been in a similar situation: a guy made an offer to buy my house in Colorado Springs when I was between renters (sadly enough, the nice old lady about to rent it was put in a nursing home by her kids...). Long story short, though I actually wanted to keep the place I sat down and did the math to come up with a number that would get me to sell it. When you are calculating it out, don't forget to factor in the taxes you will owe on the profit (we didn't have the 2/last 5 years wicket) and the potential for being bumped up a bracket with the loss of the deduction, legal fees, commission, etc. Additionally, if they meet that number, know ahead of time how much money you will be willing to pay to fix any items found during the inspection. Good luck.So here is my situation:
I own a home in IA and have been renting it out through a property manager since October. The renters extended the lease early last month through July 2010, and yesterday I received an e-mail from a realtor at the same company that I use for property management that said my renters were interested in buying the house.
I don't have much equity in the house (I've only purchased it in July 2005) and the rent covers the mortgage minus property taxes but the annual tax credit when filing is twice what I pay in property taxes. So, basically I'm breaking even/making a little having renters in the place.
The market in the area is saturated, there are 4 comparable houses on my street that are/have been on the market for over a year with prices varying form 10G below to 20G above the last assessed value of my house. If I were to sell for exactly the assessed value I'd probably break even or come out with a $1000 check when all fees, taxes, etc were taken into consideration.
Also, the area is a college town, so there seems to always be an abundance of renters, although I'd rather not rent to undergrads since it is more of a family oriented neighborhood.
So, what do I do? I won't sell for a loss. If offered enough to walk away from the house with little or no cash to me do I go for it, or hold on to the place for a while, build equity and hope to sell later?
I have a 30 yr fixed at 5.5. Definitely not more house than I could afford.
Hmmm after writing this I think I've already made up my mind, but would still like to hear coments.