Skip to main content

Details of Short Sale Financial Analysis

By
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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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

Post a Comment

Popular posts from this blog

Beauty Anxiety

By
I am spending quite a bit of time thinking and planning what I am going to put in my travel backpack. There isn't going to be a lot of room so I am taking a tip from Ottsworld and planning to leave my vanity behind . I have to admit, the idea of leaving my makeup behind makes me uncomfortable. Not because I want to wear makeup everyday but because it's a security blanket. It provides the ability to fit in if I need to and to escape the feeling that I am not participating in the unwritten rules of being a woman. Don't believe me that there is a beauty standard in this country? Check this out: Video link here . More information about Girl Culture by Lauren Greenfield here . Please note that parts of this site are NSFW. But on the flip side, I'll be saving money. I found an article in Newsweek that estimated the lifetime cost of "cosmetic maintenance" . Even if I normally spend a half to a third of this amount, that's still quite a bit quite a bit of money.
7 comments
Read more

Chickens Are Scarier Than Crows, Didn't You Know?

By
The garden is in!  If our Scarechicken does its job, we will soon have a nice crop of heirloom tomatoes, onions, hot peppers, green beans, basil, parsley and thyme! Huge thanks to my parents for their help getting the area ready. It was a jungle!
1 comment
Read more

Why Are We Here?

By
There are three ways to answer this question: Why are we here? (What are you two up to?) For the past few years we have been watching our budget closely, paying off our debt, and saving as much as we can. This has given us the freedom to pursue a dream. What dream, you ask? A random one! While we do not have a definite goal or specific plan, we have developed some guiding principles: Let life rule instead of work. Explore the country and the world. Trade "stuff" for genuine experiences. Create rather than consume. Develop a spirit of volunteerism. Take odd jobs in unfamiliar disciplines to see if there is something we love, but don't yet know we love. Live in the moment. Work for ourselves as much as possible. Dance outside our comfort zones in order to grow. Find a way to stretch the money we have saved for as long as possible. Identify properties of cities that we like should we choose to "settle down" again. ("You kids back there bet...
17 comments
Read more