On Tuesday, 11 June 2013 at 21:29:49 UTC, Walter Bright wrote:
I can't even recall anyone remembering that selling a house costs you a 6% commission to the real estate agent. Poof! There goes a big chunk of your profits right off the top.
This is a peeve of mine. I don't see my house as a financial asset, that is I don't see it as something to sell for cash. It's value to me is entirely derived from me living inside it.
I saw a politician, President Obama I think, recently say "home values are on the rise, which gives more wealth to the middle class".... but is that really the case? The market value is only transformed into cash by a) loans, which aren't a net gain (excepting a lucky investment) because you have to pay them back or b) selling it.
...and if you sell it, unless you own multiple houses, you're now homeless. And housing prices are up, so getting a new house will erase the gains you got from selling the old house! So I don't think raising property values makes me wealthier at all.
But I do feel the house is worth it financially because it erases an ongoing cost down the road. The sum of my taxes and homeowner's insurance are about 1/3 what I was paying in rent, so after the house is paid off, it is like erasing eight rent payments a year. It'll still take time for that to exceed the mortgage cost, but it eventually will, and when that happens, the house could have a $0 market value and that wouldn't matter to me because it still does what I need it to do.
