What's It Worth to You?
Maria and her husband own a cabin that's been on the market for two years. They'll end up owing money if they sell it competitively. What would Dave do?
QUESTION: Maria in Knoxville and her husband own a cabin that’s been on the market for two years. It was purchased at $185,000, and they’re trying to sell it at $190,000. To stay competitive, they need to sell it at $172,000. They’ll end up owing money if they sell it competitively. What would Dave do?
ANSWER: After you pay expenses, you’ll have to write a check for about $10,000. If that were the case and your payment is $1,100, that’s 10 months of payments. If you don’t lower the price and you pay payments for 10 more months, that’s the same thing. You are losing $1,100 a month plus taxes and other stuff. Every 10 months, you lose about $10,000 to $12,000, give or take.
Get rid of it, if we are talking about $30,000 or 2 1/2 years, I’m not that desperate. I would not want to wait 2 1/2 years. I would not want to write a check for $30,000, but I’d write a check for $10,000. Do you see why? Because in 2 1/2 years, I think it would bring more.
If you have to write a check for $30,000, don’t write it today. Let’s write it over 2 1/2 years while hoping we don’t have to write it. But it’s pretty reasonable to assume it’s going to take 10 months or $10,000. I’d do that. But I would not go $30,000 in.
Set yourself a budget as to how big a check you are willing to write. That’s what we’re saying.