I’m hitting analysis paralysis and could use this group’s insights (please be kind). I bought and lived in my house in Austin, TX in August 2015 at 4.125% interest over 30 years. Got the house for ~$330K and now it’s worth ~$550K. I’ve been in Seattle for almost 5 years, so I’d now have to pay capital gains tax if I sell. It’s currently rented for $2500/mo but between property management fees, renter turnover, property tax increases, and repairs, I’ve lost $5k - $7k on average per year renting it. I could previously write off these losses on my taxes but this last year I’m told my income was too high (first world problems). My thought was to pretend it doesn’t exist and have a stream of income in retirement one day when paid off. However, with Bellevue / East sides high cost of living and current interest rates, it’s hard to imagine buying here without selling the ATX home, and I have some fears around surprise expenses on two homes one day hitting. My partner and I are looking in the $1M range to buy locally, and have enough saved for a 20% down payment without selling the ATX home. There’s a house in our neighborhood that came up for sale which we’re very interested in, and I fear contingent buying would also be disadvantageous to us. Partner’s TC is around $250K and we are not married, and don’t plan on it prior to buying something together (unless there’s a great financial incentive we’re not considering, but so far it seems like it would just cost us more money). So the questions are: 1) do I keep hanging on to the ATX house? 2) do I even bother with attempting to buy in this area yet to “get a foot in the door” knowing full well my mortgage will be insane for likely 9+ months before rates start to come down to re-finance? Or wait it out because the world is insane and nobody knows what the next year will bring (gestures broadly at everything) 3) recent home buyers, do you have regrets? If you’ve made it this far, thanks! #mortgage #housing TC: $430K
+1 to the above. No need to cap gains tax if you use the proceedings to buy a primary home.
Does the process of waiting to sell a home (not currently listed) to make an offer on one here (which is reviewing offers Tuesday) kill my chances of being the winning bid? Or could I possibly take advantage of the exchange process during a re-finance later on?
If you do exchange, you can only get an investment property and not use it for primary, at least for sometime. Do some research to learn and understand details
Buy in Seattle now. There is literally no inventory already and when interest rate drop, you will regret
Property agent?
No
You think you are buying for 1M in Bellevue? My dude I think you might be lost 😂
What an entirely useless comment; there’s always someone. One quick scroll through Zillow would do you wonders.
For $1M…. I don’t think you can go much in the east side. Even Bothell is out of your reach nowadays for $1M
I would rather rent forever than live in Bothell 😆
My original budget was $1M back when I started searching in Summer 2023. Houses were available in that range. Fast forward in 2024, I ended up buying a $1.3M house in Bothell (which you will never buy) and really stretched it because nowhere in the Eastside that met our needs among bidding war and rising cost of renovations. For $1M, realistically you would either find a dumpster or in bidding wars unless you find off-market deals, which usually gets done in all cash, no contingency based. This is beyond crazy because I bought one in Bothell for $460k in 2016 and people called me crazy for paying that price back then up in Bothell. So all I am saying is be realistic with your budget and be open about different locations if you’re serious about buying because the Greater Seattle, as you know is packed with high earners thar you will be priced out easily.
You can sell the Austin house and use the proceeds to buy a new house without paying any capital gains on the sale through a 1031 exchange
You can’t use it as primary home though
You can easily get around that, IRS will only check the first year when you file the exchange