Submitted by MMAccg t3_113w6nx in personalfinance
To try and make a long story short, the wife and I bought a house in June 2022, moved in a month later, and now the city wants to buy up all the houses in our neighborhood to tear down and sell to developers in the near future.
Possibly relevant info: Mortgage info: $150,000 financed (no down payment) with a VA loan, bought points to lower our interest rate, ended up at 3.875%. With home and flood insurance and other taxes escrowed, we are looking at about $1030/month payments.
The limited info we have from the city so far is that they are expected to pay a fair price (Zillow estimate is $164K) and will cover closing costs and costs of moving. We may be able to go ahead and sell but still have upwards of a year (or slightly longer) before we have to move.
My biggest concern is if we go ahead and sell this close to initially purchasing we'll be hit with a big tax liability on the sale price being more than the mortgage, which we will really need to get relocated.
Other notes: We have been considering moving out of state. Our current home is really close to two big construction projects, the widening of the main road we live off of to a four lane, and a new outlet mall being constructed a mile away.
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What questions should I ask of both the city and my current lender, and what do you think our first steps should be in all of this?
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UPDATE: They have offered us $195K for the house. I'm concerned that between moving costs and the costs associated with finding a new home, we will end up paying more than that with the new interest rate even after buying additional percentage points and/or a down payment. They are offering to let us live in the house rent-free for a year, only paying utilities and carrying renters insurance on the home.