[CoachKandSportsguy]

Originally Posted by retiredguy123

It's not an argument, it's a fact. If the agent has priced the house, and then you decide to pay off the bond the day after listing the house for sale, you need to recover the bond payoff amount, or you will lose that money. Ask any listing agent if they want you to pay off the bond. They will say "NO WAY".

The fallacious argument is your timing of the payment in relationship to the sales and marketing of the house within a contractual obligation, and tieing the return of the cash to the listing price.

The listing agent doesn't want to change the sales price of the house at this point in the sales and marketing process.

However, consider these two scenarios:
Scenario A:
You list your house for $400K, bond is $20K remaining
The best bid you get is 380K, and you sell. .

Scenario B:
You list your house for $400K, you paid off the $20K remaining
You get a full market price bid, and you sell.

In Scenario B Did you get your bond payment back?
Yes, relative to the future sales price of A
No, relative to the listing sales price.

the difference is that the "current market price" of the house was not the listing amount in scenario A. The problem is that the current market price is just an estimate and an assumption and that may or may not happen. . and within the time frame of the sales process, you may get the bond payment back if the actual value of the future transaction is known with and without the bond paid off. . still just an assumption . .

If that scenario A happens, the listing price was incorrect, or the buyer was smart, and the sales rep only lost 5% of 6%, he/she can move along to the next listing. . volume means more than a small price variation to a sales rep. .

its all relative to the assumptions and the future outcomes, and you can't run exact comparisons because every house and location is unique, unlike shopping for items at the store.

good luck

[Garywt]

In a round about way we do not see the payments or the bill so it is nothing for us. The monthly payment is part of our mortgage payment. Our escrow consists of taxes, bing and insurance. Then the bill is the tax bill which is paid by the bank so we never see any of it. Yes our mortgage payment would drop about $120 a month if it was paid off but that doesn’t really matter.

[patfla06]

The interest rate on our bond was 6% back then so we paid it off after a year.

We knew we weren’t the type to move a lot so just paid it off.

[Allyson]

Originally Posted by Michael 61

Its hard for me to imagine that if there were two identical homes on the market and one was priced a little higher with no bond, that it would not be more desirable to a potential buyer than the one priced a little lower, yet with a bond.

I agree~

[crash]

Originally Posted by Michael 61

Its hard for me to imagine that if there were two identical homes on the market and one was priced a little higher with no bond, that it would not be more desirable to a potential buyer than the one priced a little lower, yet with a bond.

Well you would be wrong. The average Villager moves 3 times you will be paying off 3 bonds. It might help move your home a little faster but as a previous poster replied most realtors say you will not get the money you paid for the bond back in a sale.

[La lamy]

I didn't have to deal with a bond when I bought, but as others have said, you may want to make payments until you think this is your long term home.

[terleonard]

You pay interest on that bond over 20 years and it is not tax deductible. Are you going to sell it soon? Good luck and welcome to the Villages!

[dewilson58]

Originally Posted by MrChip72

My bond is 3% interest. I would have to pull money from investments making a lot more than 3% on average to pay off the bond so it's an easy decision. Basic logic.

You are kidding yourself, add in the admin fee to get your effective rate.

[CoachKandSportsguy]

Originally Posted by Michael 61

Its hard for me to imagine that if there were two identical homes on the market and one was priced a little higher with no bond, that it would not be more desirable to a potential buyer than the one priced a little lower, yet with a bond.

First, there is no scenario of identical houses, the lot size, location, view, make each sale unique.
Since there can't be same colors on the same street in general, the colors are unique.

Second, definition of a little.
in general, after a year, when one can sell and not lose the profit, the bond is about 8-9% of the original price, so lets just round number it and say 10%. . . is 10% a little in your view?

That would be $435K versus $399K, me thinks that is a big enough spread which would influence the sale. . .

ugh. . .

[dewilson58]

Originally Posted by crash

The average Villager moves 3 times .

FAKE NEWS


This is NOT true.

The closest true statement: Of the Villagers who move, they move three times. NOT the average Villager moves three times.

[mkjelenbaas]

Originally Posted by Michael 61

I’m a younger retiree, and just closed two months ago on a new patio villa - need to hear from others - should I pay off the bond and just be done with it, or make the yearly payments? I know there is no “correct” answer to this question - I have the funds to pay it off, but would like to hear from others their thoughts, and what they have decided to do. As always, thanks for the support and great information I receive on this site! 😀

I think it is time for you to make a decision - you can do it - give it a shot!! GO FOR IT!!

[PoolBrews]

Originally Posted by retiredguy123

My advice is to not pay it off immediately. Wait at least a year or so to see how long you will live in the house. If you pay if off now, and then sell the house, you will lose money.

Regardless of the factors that you use for your final decision, there's no reason to pay it off if you wait several years. Most of the interest on the bond hits you very early in first couple of years, and then drops off significantly in the later years. i.e., if you wait 5 years you won't be saving that much, but if you pay it off immediately you'll lower the amount you pay by thousands of dollars. I don't have the specific numbers in front of me, but I had a spreadsheet at one time that detailed savings based on year pay off.

[msilagy]

You may decide to move so don't pay off the bond - you'll sell your home either way. It's better to get a return on that money than using it to pay off a bond. Buyers decide if they like the home not if the bond id paid off in my opinion. Your choice however.....

[Ritagoyer]

Originally Posted by Michael 61

I’m a younger retiree, and just closed two months ago on a new patio villa - need to hear from others - should I pay off the bond and just be done with it, or make the yearly payments? I know there is no “correct” answer to this question - I have the funds to pay it off, but would like to hear from others their thoughts, and what they have decided to do. As always, thanks for the support and great information I receive on this site! 😀

Is this your forever home? If not why pay the bond. Use the money for your next home.

[tvbound]

Every person's situation/opinion is different, but it really boils down to determining if the money spent to pay off the bond (or even a mortgage) can earn more if used elsewhere. If a person is paying 5% on a bond/mortgage, but can earn 8% by investing that same money - it would be silly to pay it/them off.