Baltimore/Real Estate peeps! Do you think we should sell this townhouse?
January 26, 2014 7:11 PM Subscribe
My mother bought a townhouse before the housing bubble. She lost her job two years ago and is having trouble paying the mortgage. What's the process for selling the house and what do we have to lose?
posted by bluelight to Work & Money (19 answers total)
I don't want to give out the exact address, but it's a townhouse like this one and is fairly close by: http://www.trulia.com/property/3118009658-202-S-Exeter-St-Baltimore-MD-21202
She purchased it for $350,000. In 2012 it the Baltimore govt assessed it at $280,000. It may have dropped even lower. It is a three-floor townhouse with two bedrooms and 2.5 bath.
She's refinanced twice and her monthly mortgage is about $1,900. If you include the community fees that's ~$2,000 per month. Tack on the $6,500+ annual property tax and it's a doozy. She doesn't really have anything in retirement, is having trouble finding a job (doesn't speak English all that well and her previous job of 15+ years was mostly data entry but because of all the years she put in had been earning $20+/hour there), and is dipping into her savings for this. She doesn't want to sell because she'd clearly be selling at a loss. I think it's a sunk cost and she should just cut her losses.
Currently my 30 year old cousin lives in the smaller bedroom and doesn't pay rent or utilities for stupid crazy family reasons. I told my mom he needs to pay his share or get out.
Ideally I wanted to put the house up for $1,850 a month for everything (minus utilities) but if my mom lets my cousin stay there (he'd probably only be able to cough up $500/month for rent and some change for utilities) is it realistic to get anyone (or couple) to take the master bedroom for $1,200 (I can't bring myself to put it up for $1,350)?
I've seen the rent prices in Baltimore and rent is not that expensive so I know these prices are kind of high. BUT this townhouse is relatively new and nice and in a super bikeable and walkable location (5 min to Inner Harbor and right next to the free shuttles) but I'm worried that no one will want to take it.
Which brings me to my questions:
1. If we do rent (my mom does not want to sell even though it's bleeding her dry) do you think it's realistic to try and rent out the master bedroom for $1,200? Or is that crazy and should we do everything in our power to move my cousin out and put the entire townhouse up for $1,850/month (I could cover the remainder of the mortgage/tax)? If any Baltimore natives are here please chime in.
2. Is it better to just cut our losses and try and sell it? I know we probably couldn't get more than $280k (maybe not even $260k). What's the best way to do this if we do?