Today we finalized the contract on the sale of our home. It was bittersweet, as my wife and I grappled with the fact that this was a purely voluntary move – we didn’t “need” to move for something like a relo, but we chose to move to get into something bigger, a larger yard, a better school district for the kiddos. In doing so though, we’ll be leaving good friends, a good neighborhood and other things that can’t be replicated in the new place like nice trees in the yard, a stream in back, and other amenities we’ve grown used to. Anyway, we were at this for probably 60 days, which is actually quicker than I’ve seen a lot of other homes moving in this economy, but we did take a loss which was to be expected since we bought at the peak in late 2005.
Since we didn’t “have to” move and weren’t motivated sellers per se, we felt we were at least somewhat in the driver’s seat and could always just opt to give up and not move if we didn’t get a reasonable offer. Our first offer was completely unreasonable at about $100K below our asking price. It was rather absurd and we didn’t entertain it seriously. We did end up settling on a final offer that was lower than our ask price, but given what the comps have been looking like and the market realities, it would have been unreasonable to expect a different outcome. So, in locking in this deal, here were some key lessons learned and best practices:
- Buyer’s Market – It is such a buyer’s market right now that buyers literally act as though they OWN you. They expect absolute perfection for discount pricing and they will put in bids at 60%-75% of your asking price. They will then nickel and dime you along the way, like trying to get you to include additional appliances and then nail you again on inspection findings. Be prepared to walk if your buyer is too unreasonable. If you can’t walk, be prepared to lose even more money than you budgeted for.
- Getting Out Quickly for Showings – We showed the house probably a dozen or more times while it was listed. Initially it was a big hassle getting the three kids and a dog out of the house each time, but we developed a bit of a system to make this less painful. We kept a basket on each floor so we could just run through and throw any small toys, a sock, a doll, whatever, into the basket and into the closet. This gets everything off the floors in under 5 minutes. We also had several places to go. On a nice day, it was the park, on a rainy day, an in-laws. With the dog and usually requiring 1 hour slots, it’s good to have a destination to both kill time and allow the kids to have some fun.
- Eyesores – There were a few things I hadn’t gotten around to fixing over the years that the realtor pointed out as needing remediation prior to showing. Most of these were quick, but I had a couple tiles in the basement with a water mark – replaced. I powerwashed the siding, deck and walkway just before we listed. We removed TONS of clutter. You always see this on the home shows, but it really does make a difference. Between the kids’ toys and our belongings, we had tons of stuff that hadn’t been touched in over a year. When that’s the case, it’s probably OK to let it go! We also removed some furniture to make the rooms look larger.
- Quick and Cheap Improvements – While I didn’t want to drop thousands of dollars to sell a house and not “get any back”, I did want to make some targeted improvements to increase the curb appeal and at least attract buyers into an offer. Some of the cheap upgrades I did included replacing the light in front of the house with a nicer one (my wife was made it took me 5 years to do this!), getting some quarter round on our cabinets that I neglected to install when we put in the new cabinets, and painting the doorways and walls where the kids left nicks and dings all over. Additionally, we resealed the driveway again and re-mulched with nice black fresh mulch. All in all, we spent under a thousand dollars to get the home looking much nicer.
- Realtor and Price – We already knew the realtor as both an old family friend and through our prior sale (when we actually MADE lots of money :>). While it was a little awkward, we did work out a deal where I wasn’t going to pay the old typical 6%, or even the going 5%. It would be less and the rationale was that since he’ll get a commission from where we’re buying as well, it was recommended that I pay the 2.5% to the other realtor, he’d take less and make it up on the other end. As far as pricing, the comparable home sales were miserable. Given the economy, there had been virtually no sales with comparable homes and lots so we had to be realistic in our pricing. Nationwide, home prices are down well into the double digits since we bought at the peak in late 2005 and locally, down about 13%. We ended up selling for an 8% loss which isn’t that bad in the grand scheme of things given that we made 70% on our first home and the market is down. In retrospect, I do wonder if we priced too high though. The feedback from many realtors was that they expected more for the price and were going to buy something larger for that price range (I guess they couldn’t read the square footage on the MLS?). But if we had listed 10-15K lower, I wonder if we would have had a few extra walkthroughs that were priced out at the higher price point. We’ll never know, but something to consider when you price your home.
Any Other Tips from Your Home Sale?
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