Quote:
Originally Posted by Indy-Guy
What will happen if you pay your bond off and a few months or years later you decide to sell your home with the bond paid.
1. Yes you will perhaps sell your house quicker if it does not have a bond if you take a loss on the bond.
2. Will you recoup the money that you spent on your bond? ... When someone tells you they are looking to purchase a home with no bond what they are really saying is they are wanting to do that because they feel that they can pay only 50 to 75 percent of the bond. Otherwise they would not be looking for a home with no bond since you can pay your bond off at anytime.....
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Using the numbers that KeepingItREal provided, and looking at a scenario of 3 years. You don't pay off the bond, you spend with fees about $2K per year which is $6K on bond interest. The balance on the bond is still $21K. You sell the house "losing" $6K you spent on the interest on the bond. Now if the bond had been paid off and the buyer pays 75% of the bond, that would be $16K, so you'd be out the same amount of money. Plus having bond paid is a definite inducement to some buyers and makes your home stand out among similar homes. And of course, you have the added bonus of making money in the long run if you don't sell your house right away.
I think too, that people aren't selling houses so often as they might have in the past. Back in the 2005-2007 during the real estate boom, there were people buying, flipping, etc., which isn't happening now. I'd guess that most people buy now and stay in their homes. You will always have some turnover, but not to the extent it was during the booming real estate days. As I said previously, if you think you're going to keep your house more than a few years, IIMHO you'd be wise to pay off the bond.