[Bay Kid]

Originally Posted by billethkid

Not all debt has to be "bad debt".

One example; If one has sufficient funds to pay of the 3 or 4 percent interest rate home mortgage ........do not pay off the mortgage....instead invest the same amount where one can earn 6% and better. Hence allowing a 3 or more percent interest earned each year......by keeping the mortgage.

Not a matter of right or wrong or good or bad....just a very personal and to each his own comfort choice.

Stocks go up and down, but my bond debt will always be bad in my mind. That is just me. I was raised to never like any debt.

[Altavia]

Sorry if this was answered before, for two identical homes, would one with no bond sell for a higher price?

[billethkid]

A house is worth what ever price the market dictates and the buyer is willing to pay.
It is not influenced by whether there is a bond or not.
The bond of course does affect your proceeds.

To pay the bond off or not is a very personal decision based on many of life's factors/experiences.

As I usually say....to each his own without any attempt to express which is/may be right or wrong (as is done very often).

[Challenger]

Originally Posted by Robbie0723

Sorry if this was answered before, for two identical homes, would one with no bond sell for a higher price?

The anecdotal rumor is no. Not convinced, would like to see statistical "facts" Ten years ago when we bought new , the sales agent had no real knowledge of the Bond effect on total consideration.

[Altavia]

Thanks for the replies.

Whats the rational for why the bond isn't factored into tax value of a home if it is a liability?

[retiredguy123]

Obviously, the market value of a house represents what a potential buyer is willing to pay for it. The bond payments are part of the cost to own and live in the house. The bond is really no different from other costs of ownership, such as taxes, amenity fees, maintenance, utilities, insurance, etc. I'm not sure how other posters can say that their appraisal did not include the bond. How do they know whether the appraiser considered the bond in their appraisal? Don't they just give you a number? If anything, an unpaid bond would negatively affect the market or appraised value as compared to a similar house with no bond.

[perrjojo]

Everyone has different circumstances. Our bond in district 9 was over 7 percent. We were fortunate to have the funds and it made sense to pay it off at that interest rate. We also intended for this to be our home for the long run and so far, so good after 8 years.

[Love2Swim]

Originally Posted by Challenger

The anecdotal rumor is no. Not convinced, would like to see statistical "facts" Ten years ago when we bought new , the sales agent had no real knowledge of the Bond effect on total consideration.

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

[retiredguy123]

Originally Posted by Love2Swim

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

[biker1]

Ideally, the real estate agent would explain that the house without a bond (and a higher price) would have lower annual costs than the house that still has a bond. Hopefully the buyers would be savvy enough to realize there is no free lunch.

Originally Posted by Love2Swim

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

[Love2Swim]

Originally Posted by retiredguy123

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

But speaking of savvy, is the seller savvy enough to want to offer their house at a lower price to make up for the fact that they owe the bond? A lot of sellers see a house down the street offered at a certain price, and feel their house should be equally priced, irregardless of the bond. There lies the catch. I think some people have an inflated view of what their home is worth. Ultimately, the buyer needs to do some simple arithmetic, and I agree, some probably do not do so or are unable to make the best financial choice. Hopefully the real estate agent would help in that regard.

[New Englander]

Originally Posted by retiredguy123

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

[Challenger]

Originally Posted by Love2Swim

But speaking of savvy, is the seller savvy enough to want to offer their house at a lower price to make up for the fact that they owe the bond? A lot of sellers see a house down the street offered at a certain price, and feel their house should be equally priced, irregardless of the bond. There lies the catch. I think some people have an inflated view of what their home is worth. Ultimately, the buyer needs to do some simple arithmetic, and I agree, some probably do not do so or are unable to make the best financial choice. Hopefully the real estate agent would help in that regard.

Real estate sales people, in my experience , use this ignorance on the part of the buyer, to benefit their sales effort , sometimes one way and other times in the opposite way. Anyone who buys a home at a contract price of $250,000 with an existing bond of $15,000, is in fact paying $265000. Regardless of the spin of the salesperson.

[Challenger]

Originally Posted by Love2Swim

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

Unfortunately, most salespersons will not clearly cover this point and in many cases do not understand the finance issues themselves. This is not a new phenomena , but has been going on for years.

[graciegirl]

Originally Posted by retiredguy123

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

That is how we think. Our first home was paid for here. This one is too. We can't imagine leaving it, but always poised for the next step. We didn't pay off our bond for that reason.