News from the Tennessee Valley Columnists
MONDAY, MARCH 26, 2007

Dave Ramsey

Donít be a slave to house payment

Dear Dave: My wife and I are about to have our first child. Sheíd like to stay home with the baby after itís born, so weíll be losing about half our income. Weíve looked at our budget, and we can stay in the house but things would be very tight. Iíll make $42,000 this year, with a potential bonus of $23,000 at the end of the year. Our house payment is $1,550 a month. Do you think we should downsize to a smaller home and live more comfortably? — Mike

Dear Mike: I hate it when people have to leave their homes. It can be a hurtful thing to the heart and spirit.

If you had $65,000 as a steady income the house payment wouldnít be a big deal. But you canít count on a potential bonus, and from your guaranteed income more than half your take-home pay will be wrapped up in a house payment. Youíd probably have to take a part-time job, or save any bonus you get to subsidize your income just to have a realistic chance of making ends meet. Iím all for mom staying home with children — especially a little baby — whenever possible. But when it comes right down to it, Mike, you and your wife have to decide if itís worth the part-time work and budget hassles to stay where you are.

Moving is no fun, especially when itís something youíre forced to do. But you donít want to be a slave to your house payment either! — Dave

Do I really need a Realtor?

Dear Dave: Iím thinking about selling my house. Should I put it on the market myself or hire a real estate agent? — Ann

Dear Ann: You definitely need a high-quality agent. Iím not talking about some guy who hands out business cards and sells only a dozen homes a year. You want someone who works his tail off and knows the business inside and out.

A good Realtor can give your home more exposure than you can. He can also get the house priced right and sold faster.

Schedule a meeting with three or four successful agents in your area and ask these questions:

  • Why should I list my home with you? Find out what the agent will do to help your home stand out.

  • Whatís your companyís track record and reputation? If one agent or company sells more than the rest, ask why and what theyíre doing differently.

  • Does your broker control the advertising or do you? If your agent doesnít control the advertising, your home may compete for ad space with listings from every other agent in the brokerage.

  • On average, how close is the selling price to the asking price? This information is available from your local Real Estate Board. The agentís performance in this area can help predict how much youíll get for your home.

  • On average, how long does it take your listings to sell? This information is also available from the Real Estate Board. It will help determine about how long your home will be on the market.

  • Do you have a reference list of clients I could contact? Make some phone calls. Ask them to describe their experiences with the agent.

  • What if Iím not happy with the job you do? See if the agent will cancel your contract without penalties if youíre not satisfied with the service he provides.

    The agentís answers can help you decide which one is best for the job! — Dave

  • Dave Ramsey Dave Ramsey
    DAILY Columnist

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