My Personal Finance Blog

In this time of great need, any option to sell is mostly something that a lot of people are looking for, just so as to be able to have ready cash that they can use on expenditures or in paying for outstanding debts. In many cases, it’s for the latter than the former. Lacking any other forms of ready cash or income, and in most cases, heavily burdened by debt, a lot of homeowners are currently backed up with financial dilemmas and are sadly made so desperate by the sheer number of debts they have incurred and compounded by piling expenses that they are left with one very basic, almost primitive thought for a way out: sell the house.

While it may really sound like the solution is just as bad as the problem, the truth is, done properly and with a lot of thought, selling the house you own and live in may actually allow you to not only earn enough to stave off debt collectors and lenders, it may even help you pay off your entire debt. On top of this, should the sale of the house be substantial, the homeowner who sold the house may even have surplus income which could be used in relatively less frugal purposes, since the trend today with finances is the removal of expenses that are deemed to be frivolities and just stick to frugality.

Now that we have established that there are significant benefits to selling your house, let us take a look at the particular costs that are involved in selling your house:

Standing home loan – It goes without saying that a homeowner who has taken out a mortgage or two on their home is in no position to sell the house for as long as they have not completely paid off the loan. Carefully plan out how you intend to complete the payment to your standing loan, since there are lenders that practice giving a penalty to early payers, as strange as that may be to some. Also consider that there may be some other fees and payments that need to be dealt with before your loan is completely settled, so it may be a good idea to get in writing every payment included in settling the loan, just so that there is no confusion or loose ends that are left.

Commission – Money that goes to the broker, known as the commission is often the largest expense in the entire process of selling a house, ranging anywhere from 5% to 7% of the selling price. Different real estate agencies will typically charge different rates, so it may be a good idea to ask around and see which particular real estate agencies can offer you a god deal, or that agency where you stand to get the most value for what they charge. Some real estate agencies will even allow a homeowner to market their own homes, although unless you have a natural gift for selling, the sales industry is hardly a place for amateurs.

Closing expense – Following the amount that goes into the commission of the broker who helped sell your house, another significant expenditure is the closing cost. Closing costs are typically made up of the title insurance expense, which is a huge amount in itself, pro-rated property taxes, which is rarely anywhere near the amount you expect it to be, document preparation fees, and, of course, legal fees for the services of a lawyer. Closing costs are rarely standard, so be sure to get a good estimate well ahead of the due date of closing.

For other people, buying a house is the primary goal why they work. Several of them want to invest for the sake of purchasing a house once they begin earning money. Home is always on top of everyone’s priority. This is quite obvious and wise because that is the place where you can have the ultimate relaxation you want. Everyday the prices are rapidly increasing, therefore buying real estate property is becoming more and more difficult and selling it is a lot easier. Investing in a real estate is the best form of investment. Buying a house is important for anybody. However, investing in acquiring the second house aside from your primary home is the best way to invest money if you have more than enough of what you need.

It is indeed an additional expense when you buy a second house. But you can get more advantages than disadvantages of owning one. If you have money you would certainly want to invest it to something it would double your income. But provided with the kind of fluctuation the market undergoes everyday, you might just end up doing the wrong thing. Choosing to invest in a house is much more advantageous, you might pay the personal property tax but at the end of it the property might just give you the lost money. Once you have it already, you can put it out on rent or keep it as vacation house for some quiet time when you want to escape from the hustle and bustle of city life.

There is a need for you to get a home loan for your second house. You can opt for a mortgage if you do not have enough resources to put in for the loan. Even if you declare your second house as an investment property you would still have to pay an additional interest of about 1-2%. But this is identified to a large extent by the lender or agent who is handling your transaction. When it comes to down payment, you can pay it through borrowing from the equity of your first house. This is again saving you up on your taxes.

You have to secure few things before you purchase a second house. These include transport, probability of renting the place, status of the property that you are buying and the area. When you decide to buy the second house, make a thorough research about when you want to buy the property and the investment plan. This is because the whole point of acquiring the second home is to be able to save money. Do not be too impulsive when you buy your second house, there is no urgency as to where you would stay for awhile. Take as much time as you want and choose the best house you want, which would be the second abode for you. This is where you can safely say that your second home can also be as sweet as the first one.