Latest news with #biddingwars
Yahoo
25-07-2025
- Business
- Yahoo
Selling your home at a loss? Everything you need to know before you list.
During the pandemic-era housing boom, bidding wars and over-asking-price offers became the norm. However, some buyers may face a tough reality today: They need to sell — but at a loss. Whether you're facing a job change, financial hardship, or another one of life's twists and turns, taking a hit when selling your home is never ideal. However, it's not the end of the world, and you may have options that put you ahead financially. Read more: The best mortgage lenders for bad credit scores In this article: Reasons for selling a house at a loss How to know if you're actually taking a loss Options if you're facing a loss When it might make sense to sell at a loss Tax implications to note FAQs Reasons for selling a house at a loss Not every home sale ends in profit, especially if you haven't owned your home for very long. Even in a strong housing market — like the one we're in today — it's possible to walk away with less than you put in for several reasons. You lack equity If you bought your home with a low down payment using mortgages like VA loans or FHA loans, you didn't have much equity in your house to begin with. And in the early years of homeownership, most of your early mortgage payments go toward interest rather than paying down the principal. Selling in the first few years means you likely won't have built up much equity, and selling costs can easily wipe out what little you have. Your local housing market has cooled off Home values don't rise evenly throughout the country. If prices in your area have stalled or dipped while prices in other regions have continued to rise, your home might sell for less than you paid — especially if inventory has increased, buyer demand has slowed, or there's some other reason for depreciation. Life changes force a move Sometimes the decision to sell isn't about money; it's about necessity. A new job, growing family, unexpected expense, or divorce with a co-owner of the house can create pressure to sell before you're financially ready. Selling costs add up Between commissions, closing costs, and other expenses, selling a house often costs 6% to 10% of the sale price. Those fees alone can quickly turn a small gain into a net loss. How to know if you're actually taking a loss It's easy to assume you're losing money on your home if it sells for less than you paid. However, that's not the whole story. To really know where you stand, you'll need to do a little math and factor in a variety of costs. Your purchase price: This includes what you paid for the home, plus the cost of any upgrades or improvements you made while living there. Your current mortgage balance: Your remaining loan balance may be more than you expect, especially if you haven't owned the home very long. Estimated selling price: This is what a buyer is willing to pay in your current market, not necessarily what you'd like to get. Agent commissions: A typical real estate commission for sellers is 6%, as sellers have historically covered both the seller's and buyer's shares (or 3% each). Now, sellers aren't necessarily required to pay buyers' agent fees, so depending on your situation, you could find yourself paying roughly 3% to 6%. Closing costs: These can include, but aren't limited to, the title search, escrow fees, and real estate attorney fees. Repairs and prep work: From painting and cleaning to various other home improvements you pay for before listing the home, don't forget to include these costs in your total expenses. Dig deeper: How much does it cost to sell your house? A real-world example Let's say you bought a home in 2021 for $460,000 and put 5% down ($23,000). From the get-go, your mortgage loan balance is $437,000, and you start making monthly payments toward the principal and interest. Now, you're the new caregiver for your aging parents and need a bigger home. Your real estate agent says the best asking price you can get on your current house is $445,000, and you still owe $420,000 on your mortgage. You pay a 3% agent commission (~$13,350), $6,500 in closing costs, and another $2,000 to get the house ready for sale. Here's how it all breaks down: So, even though you sold your home for $15,000 less than you paid, your final loss on the transaction is $3,150 — not counting your original down payment and the mortgage payments you made along the way, which helped you gain equity in the home along the way. Up Next Up Next Options if you're facing a loss If the math shows you're selling your house at a loss, you still have choices. Some may help you avoid selling altogether, while others can help you strategically cut your losses. Stay put and ride it out If you're not in a rush to move, holding onto your home for a few more years could help you build equity and recover value. You could also save significantly if you locked in a lower mortgage rate when you bought the house than those available today, making your current payment more affordable than one you might get on a new home. Rent it out Becoming a landlord isn't for everyone, but depending on your local real estate market, it could be a highly profitable move. 'Some would-be sellers simply can't believe what their units would rent for when I tell them,' said Mark Zipperer, owner and broker with The Zipp Group in Chicago, in a phone interview. Rental income could more than cover your current mortgage and still let you make the housing move you want, especially if you live in a major metropolitan area where competition for rentals is fierce. 'Here in Chicago, we're doing open houses for rentals and getting upwards of 20 applications per unit,' said Zipperer. 'Prospective renters are even bidding up the rental price in hopes of being selected for the unit.' While Chicago's market might not reflect yours, there's no harm in checking into what your unit would rent for. If you decide to go the landlord route, Zipperer also advised getting up to speed on local rental ordinances so you're legally protected. You can also work with a property management company if you'd prefer someone else to handle the day-to-day details and legalese on the rental side. Consider a short sale If you owe more than your home is worth, you may be able to negotiate a short sale with your mortgage lender. With a short sale, your home sells for less than the mortgage balance, and the lender agrees to forgive the difference. Short sales typically require that you be behind on your mortgage payments and require lender approval. This move can also impact your credit — a consideration if you're looking to short sell and then buy another home. Bring cash to closing If you're close to breaking even, you could bring money to the closing table to cover the gap. It's not ideal, but it might prove a good strategy if selling will free you up to make a better financial decision elsewhere, such as relocating for a better job. When it might make sense to sell at a loss In some cases, taking a loss isn't a sign of financial defeat — it's a strategic move. Here are times to consider selling your house at a loss. You're struggling with monthly expenses. Selling a home you can't comfortably afford may hurt now, but it could help you get back on firm financial footing sooner. You're relocating for a better opportunity. A higher-paying job, lower living costs, or being closer to family may all justify the short-term loss. You're facing changing household needs. A growing family, aging parents, or accessibility needs might mean your current home no longer fits. It brings you peace of mind. Shedding an asset that feels like a burden could lighten your financial burden and spirits. Dig deeper: Do you have home buyer's remorse? Here's what to do next. Tax implications to note If you're thinking, 'Oh, I'll just write the loss from selling my home off on my taxes,' think again. In most cases, the IRS doesn't allow you to deduct a capital loss on the sale of your primary residence on your federal taxes. However, if the home you want to sell was used as a business or rental property rather than a personal residence, it's treated differently by the IRS. Losses in those cases may be deductible depending on your tax situation. To be safe, consult a licensed tax professional. Read more: Capital gains tax — How much you'll pay when you sell a home Selling a house at a loss FAQs What happens if you sell a home for a loss? If you sell a home for less than your remaining mortgage balance and sale costs, you'll need to cover the difference out of pocket. This is considered a financial loss, but it won't impact your taxes unless the home was a rental or investment property. If you're behind on payments, a mortgage lender may agree to a short sale; however, this can negatively impact your credit. Can I write off a loss on my house? Generally, no. The IRS does not allow you to deduct a loss from the sale of your primary residence because it's considered personal-use property. However, if the home was used as a rental or business property, a loss may be deductible under certain conditions. Always consult a tax professional to understand how the rules apply to your situation. Should I sell my house at a loss or rent it out? Renting your home could help you avoid selling it at a loss, especially if it covers your mortgage and other costs. However, being a landlord comes with its own responsibilities and risks. Be sure to speak with a real estate professional well-versed in rentals in your area before jumping into the rental market with your property. Note: The author has bought and sold property through Mark Zipperer. Laura Grace Tarpley edited this article.
Bloomberg
02-07-2025
- Business
- Bloomberg
Top Trumps
Morning, I'm Louise Moon After a good few bidding wars of late, US giant KKR may have finally succeeded in taking a British firm private.
Sky News
29-06-2025
- Business
- Sky News
KKR leads £1.7bn race for Argos store-card owner NewDay
The private equity firm at the centre of a string of bidding wars for British companies is leading the £1.7bn race to buy the owner of Argos's store-card operations. Sky News has learnt that KKR is the frontrunner to buy NewDay Group, which is owned by the buyout firms Cinven and CVC Capital Partners. KKR is not in exclusive talks, and other parties - said to include Pimco, the asset management giant, KKR, and a Bain Capital-led consortium - remain in contention to acquire NewDay. Some of the bidders, such as Pimco, have been interested in pursuing a deal to buy NewDay's consumer loan book rather than the company as a whole; others including KKR are understood to be interested in acquiring the whole business, but potentially with its existing shareholders remaining invested for a period of time. NewDay, which took ownership of Argos's store card business last year in a £720m deal with J Sainsbury, the supermarket giant, has been exploring a sale or stock market listing for months. Last November, Sky News reported that NewDay's owners were lining up investment bankers at Barclays to advise on a process. NewDay is one of Britain's biggest privately held providers of consumer credit services, with about four million customers. Last year, it reported £213m of underlying pre-tax profit, with new customer acquisitions up 36%. It also launched a technology and lending partnership with Lloyds Banking Group, and launched the pilot of a technology partnership with Debenhams Group in the final quarter of last year. KKR has become engaged in bidding wars in recent months for Assura, the GP surgeries landlord, and testing equipment provider Spectris - both of which are listed on the London stock market.
Daily Mail
02-06-2025
- Business
- Daily Mail
Cutthroat housing market in lakeside city sees it bursting with bargains - and an average home is just $225K
Rochester, New York, is one of America's most cutthroat city for house prices and while it remains affordable, sales are as competitive as ever. While the city ranks well for affordability, Rochester's home sales are a flurry of bidding wars while real estate agents prepare their clients for auction-like sales with properties often selling for way above asking price. For Rochester realtor Jeff Scofield, the market has seen prices dramatically rise by around 60 percent in the last five years. 'We were slow and steady for most of my career, [it] was a very balanced market and it would take anywhere from a month to a year to sell a house sometimes,' Scofield told While prices have remained affordable, houses are still selling for more than they are listed for. Scofield pointed out that the lack of supply has changed how buyers and sellers are approaching home sales. 'The lack of inventory is the one thing that's been helping prolong us having any sort of slowdown... because there's just so few homes on the market,' he said. 'The buyers all descend on the property and if they like it and it's priced reasonably then they put in offers and it's gone in a week.' Talha Shahid, a realtor based in the area told Yahoo that for example, a home listed at $300,000 will likely sell for $350,000. 'After one or two offers, [clients] kind of get the hang of it, and then they listen to my advice,' Shahid continued. The median house price in the metro area reached just $225,000 at the end of March, according to the Greater Rochester Association of Realtors. While the median rose by 12.5 percent from last year, it remains one of the more affordable cities in America with the median household income sitting at around $67,000 in 2022. 'We're catching up with the rest of the country,' Jonathan long, a mortgage loan consultant in Rochester, also told Yahoo. 'The housing market is a little tough, and mortgage payments are a little tough right now, but all in all, I would still say it's a super affordable place to live... but there's just not enough inventory.' According to the Realtors association, the area had just 913 homes for sale at the end of March which is down 8.1 percent from last year. On average, homes spend just eight days on the market. Due to the lack of homes on the market, Scofield told he has seen buyers list of demands diminish significantly in order to secure a home. 'It used to be that buyers had their list of demands, like we want you to leave the dining room set, the washer, the dryer,' he said. 'Now they go, well, what do you want to take? You know, we'll take whatever you want to leave. You don't even have to clean out the junk in the basement. 'Buyers are being very gracious because they need a place to live and they've lost out on, say, five homes.' Many homeowners have been resistant to selling, especially with heightened uncertainty and climbing mortgage rates. 'If you're sitting on a two and a half percent mortgage interest rate, you're not going to move right now. You're going to sit tight,' Scofield added. Currently, Zillow has 37 homes listed for sale between $200,000 and $250,000. One home, listed for $224,900, has spent five days on Zillow and features two bedrooms and three bathrooms on 1,765 square feet. A $239,900 listed property has spent four days on the site with three bedrooms and two bathrooms on 1,821 square feet. Another three bedroom property, listed for $250,000, has spent seven days on Zillow with three bedrooms and two bathrooms on 1,853 square feet. But Scofield pointed out that despite affordable home prices, taxes in the area have held a significant weight in house listing prices. 'Our taxes are high. You know, New York's got high property taxes, so historically we'd have people coming in from California or out of state and they'd look at a house and go, 'this is only $500,000. This would cost a million where I'm from.'' He said that often, despite the low listing prices, the taxes stun prospective buyers. 'So that's the downside. Our prices are good, but the taxes are high.' Yet, house prices are increasing across the country and Rochester remains relatively affordable. 'You know, average sales price has gone up to probably around three hundred right now for the average in our area,' he said. 'Which is still less than what it is in New York City.'
Yahoo
10-05-2025
- Business
- Yahoo
Buying a home in Saskatoon is more expensive than ever
Buying a home in Saskatoon is more expensive than ever. Housing prices have hit at an all-time high, and inventory is at its lowest since 2008, pushing prices further up. All different property types, including detached homes, apartments and townhouses, reached all-time high prices in March, going up around $5,000 in value every month over the last year, according to real estate experts. The Home Price Index benchmark tracks the sale price of specific types of properties over time. It's the real estate equivalent of the CPI (consumer price index). On average, the four property types have risen in value by almost eight per cent compared to March of last year, 37 per cent compared to five years ago, and 218 per cent compared to 20 years ago. As of April 23, there are only 425 available units that don't already have a conditional offer accepted. That's about a month's worth of inventory. "If no new homes were listed for the next month, there would be no inventory left within a month. Everything would be sold out in a month at that rate," said Josh Buchanan, a real estate analyst. He says it's really difficult for those wanting to enter this competitive housing market due to a lack of inventory and high prices leading to bidding wars. Some homes in Saskatoon have been sold for $100,000 over the asking price, and others were being sold anywhere between $30,000 to $50,000 over asking price, with bidding wars driving prices further up. Almost 70 per cent of homes sold in Saskatoon in April were purchased at or above the asking price, according to a real estate expert. "Even if they [first-time homebuyers] could afford to get in the market, it's like they're just getting outbid. So they're just getting priced out of the market or just giving up," Buchanan said. He said there just aren't enough homes in Saskatoon to meet the demands of its growing population. Abdullah Abrar, 25, moved to Saskatoon from Lloydminster, Sask., with his family a few years ago. They've been in the market since last summer with a $500,000 budget for a house, but haven't had any luck finding one. "It's frustrating because we were renting at the moment, and we were looking last year too, so we're just trying to get something soon," Abrar said. He said most new homes being built won't be ready this summer, and what's on the market is too overpriced. The only option he has left is extending his rental lease and hoping for better luck next buying season. "We looked at a house over in Brighton that was like $420,000 and now it's $470,000, in less than a year," he said. Abrar said even if he finds a place he's interested in, there's a lot of pressure to make an offer and buy within a day. "You're spending like half a million, you're in it for the next 20 years or so of your life. It's frustrating. You have to be quick on your decision, and it could turn out good or it could turn out bad," he said. Abrar says right now he is helping his family buy a home in the city. He wants to settle down in Saskatoon and start his own home-buying journey, too, but that dream seems to be slipping farther away. Experts say the unbalanced housing market is also impacting the rental market. Inesh Rai, a Saskatoon realtor, says many renters who want to become homeowners can't find a home they can buy. They're losing on multiple offers they make and, like Abrar, being forced to give up and continue renting. "That's increasing demand on the rental market. Rents are going up as well because more people are giving up on buying," Rai said in an interview. He fears that Saskatoon and Saskatchewan may not remain as affordable as they've been in the past. "When my family and I first moved to Canada, we were in Ontario for the first four or five years, and there was no chance in hell we were ever gonna put our foot through the door, buy a house," he said. They moved to Prince Albert, Sask., where Rai grew up, and where his parents were able to buy their first home because of the affordability that Saskatchewan offered. "I'm terrified that that affordability is going away," he said. Rai said you should get a pre-approved mortgage so you know what you can afford and make an offer quickly. He suggests going to a local real estate professional and asking them what is the best chance you have of getting accepted in this market, and to make your offer quick and desirable. Buchanan said that the solution to this unbalanced housing market is to build more housing. "I think there needs to be strategies for construction. I like the idea of building multi-unit complexes that attract young working professionals without kids and retired individuals who maybe don't have kids at home anymore." He said that Saskatoon needs at least 1,000 additional units to balance out the market but that won't happen overnight, so the city stands to see high prices and cutthroat bidding wars for some time at least.
