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Mapping out a plan for the next year

October 15th, 2014 at 01:51 pm

So our real estate agent emailed us a detailed run-down of what's been going on with selling units in our condo. She's so great! But the news was not. All the 2-bedrooms just dropped their prices, and the ones that sold, were sold for less than asking with the seller covering part of closing costs.

So we're following suit and dropping our price $5K, to $140K. Our agent thinks we might not sell this fall at our current price and would have to drop the price in the spring anyway since we'd have a stale listing. So we're hoping the drop now will precipitate a sale. There's still a glimmer of hope with one of the flaky buyers but we already offered them $140K with no nibble, so I told our agent to throw out $138K and see if it gets them interested again.

I'm figuring if we do sell in the next month, the best we can hope for is $135K and we pay 3% of closing costs. So the best case scenario is we lose $28,600 in getting out from under the mortgage.

Then there's the crazy seller of our new place that I really want to get out from under. Our payments are only $118.70 per month for the next year, but I can't stand working with him. So I want to come up with $26,500 ASAP to pay him off.

So, OK, we've got to come up with $55,100 to get out from under these two burdens. (I'm choosing to assume the condo will sell at the above numbers but am well aware that's not a guarantee.) I came up with a plan that could work, but it basically means no fun money [beyond basic spending money] for the next year and a very steady income from AS's freelance business. It also means using all of NT's year-end bonus (he found out he's not getting a raise this year, but we can count on the bonus at least). It assumes we can refi the house in February to save $450 per month by eliminating PMI. And it means using all the money we save by not having the condo mortgage and association payments.

It means no travel our housecleaning for the next year, too. So in its current form, the plan is going to require patience and careful budgeting and a deferral of two of our favorite luxuries.

But, it's a plan. It's somewhere to start, even though so many things could change over the next year. So now we just cross our fingers that the condo sells soon.

6 Responses to “Mapping out a plan for the next year”

  1. debtfreeme Says:

    I am confused: 118 a month for a year pays off 26500?

  2. ceejay74 Says:

    Nope, it's interest-only for a year, then I start paying principal. It's a 10-year loan. I thought I could handle it for a year since it's such a tiny amount, but the amount of stress and aggravation the first two payments have caused make me want to just pay it off right away.

  3. creditcardfree Says:

    Would the seller agree to the full years worth of $118 payments now. I know in another post you mentioned monthly checks. I know it wouldn't pay him in full, but maybe he would feel better if he didn't have to worry about $118 checks each month. It would also get him off your back for a year...theoretically. Might open a can of worms, but something to think about.

    That is a lot of cash to come up with. Hope it works out for you guys!

  4. frugaltexan75 Says:

    Is this something that all of you want? Enough to handle a year of living like that?

  5. CB in the City Says:

    I don't think a year of no travel or housecleaning is too stringent. That describes most of the years of my life! Smile You'll appreciate those two luxuries all the more when you get them back!

  6. ceejay74 Says:

    CCF, I wouldn't trust him to do the math correctly if I pay in full before the year is up. He doesn't seem very organized, or maybe he's just too busy to deal with small matters well. Also, I may need to prioritize paying off the condo mortgage before I can work on his debt, so I'd like to keep as much cash in the bank as possible. But thanks for brainstorming -- many good ideas have come from comments on this blog! Smile
    FT, I think we can handle it. I can't say it's really important to NT and AS, but it is important to them that I'm feeling good and confident about our financial situation, and doing this would definitely achieve that.

    In a way, this is what we would have been doing for the next year had we NOT found a perfect house: Saving like mad for a proper down payment and for getting out of the condo. This way, it's more of a scramble to balance the budget and pay OFF home debt vs. saving up first to avoid taking as much on, but we get to be in our great new house that we love, so it's kind of a tradeoff.

    That said, these are optional goals. I can restructure the remaining condo debt in the form of student loans, 0% credit cards and unsecured personal loans if needed, and/or not do make-up retirement contributions. And I don't have to pay the crazy seller off early if it doesn't turn out to be feasible.

    CB, I think it will be well worth it! The only pain point for me is that I told my sister I'd visit my folks this winter or early next year. My dad would totally pay for me to come out, but I'd feel bad asking. So I have to decide if I can scrape up enough to afford a trip out -- whether for just me and the kids or for the whole family I'm not sure.

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