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Buying & Selling a Home

This Couple's Patience Helped Them Survive the Housing Bubble

Rather than try to sell a home with an underwater mortgage, they stuck it out until they could eventually turn a profit.

Photos by Carl Tremblay, Margaret Lampert

Then: Home prices were still falling in late 2010 when we met Shannon and Al Becker, both 39, of Norwood, Mass., southwest of Boston (pictured above). Like nearly one-fourth of all U.S. homeowners, they were underwater—that is, they owed more on their home than they could get by selling it. But the couple never considered walking away. As Al put it, "That would be un-American, and my parents would kill me." Their plan? Wait it out.

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Now: The Beckers hung tight for the next five years. They had bought their home in 2005 for $388,000. Al estimates that its resale value peaked at $423,000 in late 2006, then plunged and stood at about $345,000 in 2012, leaving the couple almost $24,000 in the red. Their home began to feel snug as the couple’s daughters, CeCe, now age 8, and Coley, 6, grew. But the family lacked the down payment for a new house.

Fortunately, the Beckers weren't financially distressed. Both had good jobs, Al as director of marketing for Jack Conway, a real estate company, and Shannon as a high school teacher. Although they could handle the payments on their first and second mortgages, they refinanced their first through the federal Home Affordable Refinance Program (www.harp.gov) and got a 30-year fixed rate of 5.35%. But they could use the program only once, and they chafed as mortgage interest rates fell to historical lows.

See Also: 7 Features That Will Help Sell Your Home Faster

Instead of prepaying their loans to build equity more quickly, the Beckers stashed money in their retirement accounts, advanced in their careers and waited for home prices to rise. By 2015, they had regained enough resale value to cover their mortgage debt, a real estate agent’s commission and a down payment on their next home. Hoping to cash in on a strong sellers’ market, they spent the spring of 2016 spiffing up their house; they listed it in June for $389,000. After the first weekend, they received two offers and accepted one for $395,000.

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Meanwhile, an acquaintance referred the Beckers to a for-sale-by-owner home on a quiet street in a desirable neighborhood near the girls’ schools. The Cape Cod–style home had a finished basement that the girls could use as a playroom now and a hangout later, as well as a swimming pool that was perfect for entertaining. The couple got the house when they offered the full asking price of $517,000 (to avoid spooking the owners by offering less). They put down 10% and took out a 30-year loan with a fixed rate of 3.75%. “I just laughed at that rate,” says Al. “We bought this beautiful house with a better location for more money, and my monthly mortgage payment is actually $100 less than before.”

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