Debt Dumpers 2024

[afan]

We have a realtor and have spoken to her. The comps I mentioned earlier came from her. The things that need done came from her suggestions.

We literally can not afford to do any kind of updates unless we get a loan. At this point, she doesn't even have enough to cover her mortgage payment much less pay the regular bills.

Given that I'd be more concerned with the now and selling the house to get her money than worrying about stuff that'll take longer.

The only way I'd consider it is if the comps are selling quicker. If the house will sell just as quickly as is, remove the stress and sell it.

Taking a loan is going to cost something and need to be paid back in the mean time. Then there's taxes that'll have to be paid on the sale etc. You've really got to consider if the extra costs in improving the house and taking longer to list are worth the extra expense.

I'd be more concerned with getting an inspection and what has to be fixed and getting that done so it'll sell than painting and putting in new carpet. So many people just go in and paint and change the flooring it's a waste of money.

 

[trenty]

We have a realtor and have spoken to her. The comps I mentioned earlier came from her. The things that need done came from her suggestions.

We literally can not afford to do any kind of updates unless we get a loan. At this point, she doesn't even have enough to cover her mortgage payment much less pay the regular bills.

In that case, I would sell the house "as is" and get out of it what you can. A HELOC could just complicate things and, as others have said, delay your sale so that you wouldn't even get that gain. You still have to find a way to pay the bills while the updates are being done. She might not even qualify for a HELOC on her own. Are you willing to co-sign? That could put your financial future in jeopardy if things don't go as planned.

 

[ruadisneyfan2]

We have a realtor and have spoken to her. The comps I mentioned earlier came from her. The things that need done came from her suggestions.

We literally can not afford to do any kind of updates unless we get a loan. At this point, she doesn't even have enough to cover her mortgage payment much less pay the regular bills.

In that case I would talk to a few banks about HELOC/HEL vs. a reverse mortgage and weigh the pros/cons of both. Most bigger banks list their HELOC interest rates online. See if it's even feasable right away before she gets further behind.

 

[ruadisneyfan2]

Given that I'd be more concerned with the now and selling the house to get her money than worrying about stuff that'll take longer.

The only way I'd consider it is if the comps are selling quicker. If the house will sell just as quickly as is, remove the stress and sell it.

Taking a loan is going to cost something and need to be paid back in the mean time. Then there's taxes that'll have to be paid on the sale etc. You've really got to consider if the extra costs in improving the house and taking longer to list are worth the extra expense.

I'd be more concerned with getting an inspection and what has to be fixed and getting that done so it'll sell than painting and putting in new carpet. So many people just go in and paint and change the flooring it's a waste of money.

What do you mean by taxes on the sale? Sales tax? That might vary state by state. We didn't have to pay taxes when we were the seller, only the commission to the realtor.

 

[afan]

What do you mean by taxes on the sale? Sales tax? That might vary state by state. We didn't have to pay taxes when we were the seller, only the commission to the realtor.

Yes, if you aren't putting the proceeds of the house you are selling into another house you'll need to pay income tax on it. The feds will want their cut and then if there's state income tax that too.

 

[focusondisney]

Yes, if you aren't putting the proceeds of the house you are selling into another house you'll need to pay income tax on it. The feds will want their cut and then if there's state income tax that too.

Not necessarily. Up to $250,000 of profit may be excluded from the sale of a single person’s primary residence.

https://www.irs.gov/businesses/small-businesses-self-employed/sale-of-residence-real-estate-tax-tips

But it needs to have been the primary residence for at least 2 years prior to the sale. So maybe another reason to sell now & not take time for updates. If they take too long & the mother isn’t living there, that may jeopardize the tax exemption.

 

[barkley]

also, if the paint, carpet, making it pretty costs 20k, it take an extra 4 months to get the proceeds, higher real estate commission, higher realty transfer tax, how much extra are you really netting? we just had my mil home painted, top to bottom. paint alone was about $1500 (50/gal) plus paying the painter, trim etc isn't cheap

we got a bid on doing interior painting a few years ago and it was gutting how much they wanted-and this was without doing any of the trim and with the wall having no need of repairs.

We like carpeting but we’re old. Lol. The latest trends are toward hardwood, laminate or tile flooring.
This is why it’s good to talk to a realtor.

with both of the prior homes we've sold they had newer carpet (higher end/replaced and upkept well about 2 years prior to sale). in both situations the new owners ripped it out either immediatly before or after moving in and replacing it with their preference in flooring.

'd be more concerned with getting an inspection and what has to be fixed and getting that done so it'll sell than painting and putting in new carpet. So many people just go in and paint and change the flooring it's a waste of money.

the last realtor we used (as a seller) had 'a guy' who he had clients hire to do a mini inspection on homes he was listing. the guy was familiar with particular issues that came up with houses of a certain age/by certain developers in the area and the realtor's attitude was to address what a buyer's inspection could reveal and be used to negotiate a price reduction. fix some things/be prepared/price so for others you could offer a credit back. only cost us a few hundred and that was not due and payable until closing. inspector found a few very inexpensive fixes that a buyer would have tried to negotiate thousands off for. well worth it.

But it needs to have been the primary residence for at least 2 years prior to the sale. So maybe another reason to sell now & not take time for updates. If they take too long & the mother isn’t living there, that may jeopardize the tax exemption.

the other issue with doing repairs/refreshes that take time is if the owner is already living elsewhere AND receives any kind of public assistance (including ssi) and/or services that are income and asset based (rental assistance/subsidized senior housing or care providers...). in the case of something like mediCAID (not mediCARE) or one of the programs with low income social security recipients wherein mediCAID pays the mediCARE premium (slmb/qmb) your home is only exempted as an asset if you are either activly living in it OR it there is some circumstance where you live elsewhere for a temporary period with the intent to return. a person who moves out while the house is selling may find themselves immediatly ineligible to the programs they rely on. in other cases when the sale occurs there's a calculation to determine how much you were overpaid during the period you were out of the home (and the monies you received from the sale are no longer an exempt asset so selling a low income senior's home is not always the windfall some anticipate if it means they lose eligibility to high cost services and programs).

 

[focusondisney]

Really great information @barkley , thanks!

 

[barkley]

Really great information @barkley , thanks!

you are welcome! i just saw far too many of my clients with dshs SO disadvantaged by doing (or having their family) do something that at face value makes such logical sense-but the rules and regulations for the programs are anything but logical. it's why i think the few hundred a consultation with an elder law attorney is the best investment someone with older family members OR (as in my case) a disabled adult child can make. they have staff that know that state's and the fed regulations inside out and can give advice on how to do financial transactions/apply for services...to ensure their needs are provided for (cuz in reality $100,000 may only cover less than a year's care for someone paying it out of pocket but some programs just take that $100,000 figure and divide it by the financial grant a person receives and it creates literaly a decade of ineligibility ).

 

[ruadisneyfan2]

Yes, if you aren't putting the proceeds of the house you are selling into another house you'll need to pay income tax on it. The feds will want their cut and then if there's state income tax that too.

Wow, I hadn't realized the capital gains exemption for seniors had been removed.

 

[barkley]

then if there's state income tax that too.

yup, where i live you can figure that between real estate commissions and state tax to just plan on 10% of your sales price being a loss. i guess though in the 'big picture' it's still preferable to not be paying state income tax (or living a handful of miles down the highway where there IS state income tax, state home sales tax AND sales tax on all groceries ).

 

[StitchesGr8Fan]

If she can’t afford the mortgage, the time you spend getting g approved for a HELOC (if she can even get approved, which is doubtful if she can’t pay her mortgage as is) then get the work done, then get the house listed and sold, means 3-6+ months of mortgage payments on top of the HELOC you have to pay back. All of that will eat in to the profits so she won’t be getting an extra $50k to live on.
It sounds like you are so focused on the dollar value sale of the house you are missing the costs that will actually make it much less than you are anticipating.
I’m sorry your mom is in this situation. But take the panic out of it and realistically look at the effort versus reward before jumping to a conclusion that could put your mom in a worse financial situation.

 

[Sheree]

What do you mean by taxes on the sale? Sales tax? That might vary state by state. We didn't have to pay taxes when we were the seller, only the commission to the realtor.

realty transfer tax

 

[Sheree]

reverse mortgages are cosstly

 

[Tygerlilly]

I'm going to Vegas with hubby (thank you comped rooms, dining credits, freeplay money, and flights purchased with points) next week for a few days. I need the break from all the chaos. When I get back I'm planning on doing a 2 day garage sale to try and get rid of stuff in the house, including an entire garage full of tools, a boat, and a trailer. Hopefully that will earn me at least enough to get some stuff paid. I'm more excited to get things out of the house/garage.

She has to stay living in her home until it sells. We have to use the proceeds from the sale to buy her next home. It's all just a mess and I'm tired. So I'm going to enjoy my break in Vegas, eat some good food, relax with hubby without my kids, and who knows, maybe I'll win the million dollar dragon link grand and it'll solve all my problems.

 

[goofytinkerbell]

1

 

[ruadisneyfan2]

realty transfer tax

I guess it is a tax. In NJ I think they call it a county recording fee so when u said taxes I was thinking regular sales tax.

 

[ruadisneyfan2]

I'm going to Vegas with hubby (thank you comped rooms, dining credits, freeplay money, and flights purchased with points) next week for a few days. I need the break from all the chaos. When I get back I'm planning on doing a 2 day garage sale to try and get rid of stuff in the house, including an entire garage full of tools, a boat, and a trailer. Hopefully that will earn me at least enough to get some stuff paid. I'm more excited to get things out of the house/garage.

She has to stay living in her home until it sells. We have to use the proceeds from the sale to buy her next home. It's all just a mess and I'm tired. So I'm going to enjoy my break in Vegas, eat some good food, relax with hubby without my kids, and who knows, maybe I'll win the million dollar dragon link grand and it'll solve all my problems.

Me too!
It’s our Garth concert! I can’t wait. He only knows we’re going away for our anniversary but doesn’t know where. When I told him it’s not a cruise, or a Caribbean island, and has nothing to do with Disney, he was totally stumped.

I’m so looking forward to seeing the look on his face. I guess when we check in at the airport, he’ll know we’re flying to Vegas.
I’m trying to think of a good way to surprise him with the tickets. We’re not big Vegas people so he’ll know right away it’s some kind of show.
Maybe I’ll just point to the sign outside Caesar’s Palace.

Weather is looking gorgeous. Our first full day will be 95 and of course low humidity.
That’s our chillin’ by the pool day.

 

[Sheree]

I guess it is a tax. In NJ I think they call it a county recording fee so when u said taxes I was thinking regular sales tax.

there's recording fees to the clerk's office but in NJ there's a realty transfer tax. can vary but typically 1% f rice

 

[ruadisneyfan2]

there's recording fees to the clerk's office but in NJ there's a realty transfer tax. can vary but typically 1% f rice

We’ve been in our house for almost 28 years. If we paid it, it's all kinda hazy now. I was overdue at settlement.