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Details of Short Sale Financial Analysis

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After our recent post about our experience short selling our house, Rich and Simone asked about the specifics of our home value "best case scenario". Something that has helped us while planning for our trip has been other blogs that practice full transparency, especially with finances. Jonathan and I decided awhile ago that we would provide the same openness to our friends and readers.

So, without further ado, we are now debuting our first Helpful Detailed Financial Picture PostTM.

Home Value Best Case Scenario

Assumptions:
1. Our home value will not drop below the current value.
2. Our home value will start to appreciate immediately at 4% per year.
3. Closing costs will be 10% of the sales price.

Projected Home Value Over Time

Click to embiggen

Amortization Schedule

Click to embiggen

Conclusion: We will break even in 2016.

Home Value Worst Case Scenario1

Assumptions:
1. Our home value will stay flat for the indefinite future.
2. Closing costs will be 10% of the sales price.

Amortization Schedule

Click to embiggen

Conclusion: We will break even in 2024.

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1 Actually, the worst case scenario is that our home value will continue to drop.

Comments

  1. SimoneJanuary 17, 2010 at 12:40 PM

    Thanks for sharing this. I'm plugging my numbers in right now. I can't wait to see what my best case and worst case are.

    BTW - How did you decide on an assumption of annual growth at 4%? Is this the standard growth rate if the economy stabilizes?

    ReplyDelete
  2. EllenJanuary 17, 2010 at 1:55 PM

    I think we got that number from Dave (who works in the mortgage industry) as a sane home appreciation rate and what we can expect for the future.

    ReplyDelete

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