Email 1 from Todd the day after he put my bank account negative and blamed me for having my credit card attached to MY BlockBuster account:
Amy,
Since we are communicating rather effectively right now,
perhaps I should take the opportunity to talk about the house. After
talking with the real estate agent, it appears that this is a really bad time to
sell. If you are open to the idea, I would like to talk about the
possibility of renting the place out and using it to generate some additional
income instead of potentially taking a loss on the sale at this point in
time.
I figure the additional income could help you out, and help
me to cover more of the child support, thus helping you out as
well.
$1109/mo currently pays for the mortgage payment and all
taxes. I figure if we could rent it out for $1700/mo, that would leave us
with $591/mo. in income from the house. If we’re going to rent it out, we
should plan to put about $5-8k away for potential repairs, fixing the place up
between renters, and covering the mortgage between
renters.
Assuming that we got renters in on a one-month lease with
first month + last month + security deposit, we could slowly put away 5k over a
12mo period and that would still leave us with $174.33 per month in
income. Once we have 5-8k put away, we could start taking the full $591/mo
in income and only cut that back when we have expenses that dip into the
savings.
Additionally, the mortgage would be getting paid and we
would continue to build equity in the house until the housing market improves
and it becomes a good time to sell. Right now, the mortgage is as good as
it is ever going to get (5%-15yr fixed) and if the rates ever drop below 5%, we
could always refinance.
Additionally, if it turns out that the
renting thing works well, we can choose to put some of that extra income into
the house payment to get the equity paid off earlier. For
example...
$100 extra per month = 9.2 yrs. (Adam will be out
of school)
$200 extra per month = 8.1 yrs.
$300 extra per month = 7.2
yrs.
$400 extra per month = 6.5 yrs.
$500 extra per month = 5.9 yrs.
(Kyle will be out of school)
Once the mortgage is paid off, that
will leave approximately $15k/yr. in income after taxes, providing that we never
raised the rent. That would sure go a long way towards helping the kids
out with college (if they decide they want to go), or if the housing market
improves, we can simply sell it off.
Anyway... That’s looking
a long way ahead. I just wanted to get you thinking about the long term
more than the short term. I know that you just want to get everything done
and over with, but I don’t think that right now is the right time to sell the
house. Perhaps it is in both of our best interest to hold on to the house
for a while, rent it out, and see if the housing market
improves.
If it turns out that we aren’t able to rent it out for
enough money to break even, then we can choose to sell it anyway. I just
wanted to present this idea in case you would be willing to do something like
this.
We can always split the assets up at this time by forming a
rental company, putting the house in the name of the company, and giving each of
us their appropriate percentage ownership in the company. That would
finalize things, leave us in a position were we wouldn’t be taking a loss.
Hopefully we would be able to work that out in such a way that we could keep the
current mortgage and wouldn’t be required to refinance at a higher
rate.
What do you think about these
ideas?
-Todd
Email 2 is my reply:
Todd,
Thank you for taking the time to compose this message but I
am not interested in the house being a rental property for a number of
reasons.
If you are not interested in selling at this time you can
buy me out of my 1/2 of whatever the lowest amount you were willing to accept
for a sale price and then you can move forward with it being a rental property
for yourself.
If you are not interested in buying me out of my 1/2
then the only other option is to sell it.
Thank you,
Amy
Email 3 is his reply to me:
Amy,
That’s fine. I just wanted to present that as an
option. I figured it would be better to be making money off the house in
the long run instead of selling it cheap today. Selling it today, you and
I will take somewhere near 17k out of the deal after everything has been split
up. If we waited and paid the entire house off and rented it out, we could
be making 15k PER YEAR instead of a 17k one time profit. It just seemed
like a smarter choice to hold on to it
However, I will be glad to
get everything off my plate and behind me sooner than later, so if you want to
simply sell the house, that is fine with me.
I have no interest in
“buying you out”, so we’ll put the house on the market and get it sold.
After talking with the real estate agent, I doubt that we will be able to get
much more than $140k out of the house (if that). In that case, here is how
things would all work out:
140,000.00 (Sale
Price)
-84,196.39 (Loan amount at time divorce was
filed)
==============
55,803.61 (Remaining
Equity)
-21,700.00 (Repay my
parents)
==============
34,103.61
/2 (Split between you and I)
==============
17,051.81 (Your/My Individual Equity)
Obviously the amount that you
and I would get back from the deal would vary depending on what the actual sale
price of the house ends up as. Below is a list of the various selling
prices and what our individual equity would be at that
price:
180,000
33,951.81
175,000
31,839.31
170,000
29,726.81
165,000
27,614.31
160,000
25,501.81
155,000
23,389.31
150,000
21,276.81
145,000
19,164.31
140,000
17,051.81
135,000
14,939.31
130,000
12,826.81
125,000
10,401.81
120,000 7,901.81
You’ll need
to decide what the minimum amount you are willing to be left with and figure out
what the corresponding minimum sale price is that you will
accept.
These amounts DO NOT take into account any of the fees
involved with selling the house. Obviously we can take those costs out of
the equity in the house, but I would expect those costs to come out of the
equity prior to us splitting what was left, so we both take on the burden of any
of those costs.
Anyway... Let me know what the minimum sale
price you will accept is.
Tanks.
Email 4 is Todd sending an email to the realtor we are working with and he attached all of those emails that are listed above:
Judy,
Here was my discussion with Amy. As you can see, the
ball is in her court. She needs to determine what the minimum she can live
with is. I’ll let you know as soon as I get a response from her.
Email 5 is Judy's reply to both of us:
Hi Amy and Todd,
Well...I have to say that the 180,000 does look
better! It would look even better if we could sell it for 200,000.
That is not reality. What we have to work with here are the facts of what the
"market" dictates, not either of you or me...but the market. If it was up
to us...well...I know the price would be higher. Just keep that in
mind. Let me know if there are any questions you need
answered.
Judy
Email 6 is an email I sent to Judy and Ken:
Judy,
I am not CCing Todd in this email.
When we
talked I told you flat out whatever you felt the highest we could go - was what
I was willing to list it as. I will just take what advice you have to give
and go from there.
He is not taking into account - realtor fees,
fix up cost and closing costs. So since he seems to think I am responsible
for paying back his parents (which was a gift/loan prior to marriage) my guess
is we are going to get zero in the end from the sale of this home.
I am letting you know that whatever you feel the highest we could
sell it for without making repairs vs. making repairs. If you could please
make that recommendation to both of us - I will then go from there with "making
my decision" since the "ball is in my court".
Sincerely,
Amy L.
Powers
Email 7 is the response from Judy to me:
Good Morning Amy,
I am so sorry that this can be so frustrating. I
standby by $149,000 with some cosmetic fixes. What I will do when I get to the
office this morning is shoot to you a sellers net sheet so that you can see the
costs involved with selling. I hope this will help you. Please take care
of yourself and the little one you carry. Big deep breathe...
Email 8 is a reply from me to Judy and Ken:
Sounds good Judy...
There is no decision to be made. We
need to sell the house and not have it listed for years because of an price that
was dictated by greed.
I am standing by what I said - your suggests
are what I will go with. So $149k it is.
I would still love
to see a list of what the costs would be though when you get around to
it.
Thanks!
Amy
Email 9 is an email from Todd to Judy and myself regarding her email to both of us:
Hi Judy,
Thank you for your feedback.
Obviously our
intention is to price the house at the best level possible to get the best price
and still sell it. I am not interested in selling it cheap just to get it
off the market quickly. Conversely, I don’t want to price it at a level
that is going to keep the house on the market for a year either.
I
also understand that Rockford, MI is one of the few places in the state that is
actually still expanding. So, while the market might not be that great
everywhere else, I still think that we could certainly get a fair price and
shouldn’t have to “settle”.
At this time, I am still waiting on a
reply from Amy as to what the minimum price is that she will accept. As
soon as she makes that decision, we can move forward.
I’ll let you
know as soon as I hear anything.
Thanks.
Email 10 is from me to Todd, Judy and Ken:
Todd,
I have been conversing with Judy on what to list it
at. I will be working with her. We obviously need to agree but at
this point in time I would rather that we both just let her know what we are
willing to list the house at and we can go from there.
The market
is what it is and there is no way to get more out of people for a house that has
not been maintained. The economics of Michigan are not the best and we are
going to be luck if we get what we paid for the house without it sitting on the
market for a long period of time.
The ball is not only in my court
so please realize this. Let Judy know what you are willing to sell it for
and we will go from there.
Sincerely,
Amy L. Powers
Email 11 is from Todd to me:
Amy,
I’m waiting on a reply from you. As soon as you give me
an answer, I will continue.
Thank you.
Email 12 is from me to Todd, Judy and Ken:
Todd,
As I stated in the earlier email - Judy already has the
information from me - she is awaiting on the information from
you.
That is how we will move forward.
Amy
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