Buy land now or wait?

[Rhonda]

I am glad to have found this site as it is a wealth of information! I wanted to know any opinions on my situation. We currently live in a 1996 Commodore doublewide in a park in Michigan. We have found an acre of land in a perfect location for us and are considering moving this home onto it.However there is a 2004 Commodore Modular Aurora Series floorplan that both my husband and I absolutely love. We were considering trading this one in on that one and go for a construction loan on the land/home together,but would probably lose alot of $$ on trade in.. We were also considering just buying the land we like and waiting and trying to sell this one. But in my particular park there are a lot of homes for sale and they simply aren't selling. The lot rent is outrageous and goes up every summer. My neighbor had hers up for sale for a very long time and just couldn't sell it.They are currently looking for land to just move it to in order to get out of this park. I guess my question is: do you think we should just take the loss to get the modular and land-or buy the land because it fits the bill and try to sell this one for awhile and I guess it would be a last resort to just keep this one and move it.The city we would be going to has different specs for the homes so we would have to put a new roof on this one as well paired with the cost of moving,set up etc.. Sorry so long,
Thanks in advance,
Rhonda

[rmurray]

Tough questions...I do not blame you for asking others opinions..

First...buy the land if you can....even if you do not build for a while..it will go no where and waiting could make you lose it to someone else..

Now the problem...If you trade...you will lose tens of thousands of dollars...lots of money for anyones budget...Remember the lost money multiplies if you finance part of it into you new home because of the additional interest..

Selling your can talk a long time...just like any home in most markets..housing sales can average about 6 to 9 months...some being sold the first day..others well over a year after they go on the market..Even dealers who do this for a living have homes on their lots for sale that have been there for over 1 year..During that time..interest rates on the new home could go up..maybe a lot...Each 1% increase in interest on the new home from todays historical lows would cost about $25,000 additional interest over the full term of a $100,000 loan..So the risk of you trying to sell is that the current low rates rise on the new home...maybe you get $20,000 more on the sale...only to risk paying tens of thousands more for the new home..Ouch..

Of course the cheapest route would be to move your current home and keep it...It would cost about $10K...but if you set it right..you will be able to refi it and the land for the current low rates and save more than that in interest over time..

The next lowest course route would be to buy the new home...NOT trading yours and selling it in the park...Let's say your rent and payment are about $800...if it takes you a year to sell..you will have spent about $9600 (plus taxes and insurance)...Hopefully you will get at least $20K more for the home than a trade..This way you suffer for a while..but once done it will be over instead of with you for many years to come...Of course...few of us can actually afford this option because of the extra payments every months..a hybrid of this would be to rent the double in the park (if they will allow it).for a few years until the resale market is much better..This is lots of work and some risk for you...but again you will not be delaying your problem by financing it into another home..

The third possibility would be to buy 2 pieces of property...move the current home to the second property and sell it as a package...You will recover many thousands..maybe tens of thousands this way...

Of course...as always...the easiest is the most expensive in the long run..trade...add the money lost to the new home...pay for it for years...but go on with life...fish..party..hunt..travel..enjoy..its over..

Tough decisions...Good Luck