Sell the House to Get Out of Debt?
Andrea from Twitter wants to know if Dave ever recommends selling the house to get out of debt. Dave explains why he only recommends it as a last resort.
QUESTION: Andrea from Twitter wants to know if Dave ever recommends selling the house to get out of debt. Dave explains why he only recommends it as a last resort.
ANSWER: Only sell the house as an absolute last resort, and there’s just a couple of times when you’ll have to do that. One is if there’s no way to turn the corner without doing it. Two is if you wanted to sell the house anyway. In that case, it’s not really about getting out of debt. Three is if the house is just too expensive. If your house payment is 50% of your take-home pay, you can’t win with that. Then, you’ve got to sell it because you shouldn’t have bought it in the first place.
A large percentage of the time, the house is not the problem. There’s a lot of other stuff that’s the problem. I would sell a car as the first option to get out of debt. That’s just stupid. So we’re going to delay the house; it’s going to be the last thing we do. Of course, that’s assuming that you don’t want to sell the house. In some markets right now, it would be a good thing not to sell. You need to ride the storm out that some of you are facing. A lot of markets are already recovering very rapidly. Real estate is a lot more alive, dynamic and fluid across America—with the exception of some trouble spots—than the news media would let you believe.
There are some seriously good situations in real estate right now.