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The Joys of Homeownership: Part 3: Finding a Buyer

See Part 1 & Part 2.

Timing the Market

We heard a neighbor wanted to list at $1.1M or more but would not sell for another few weeks. Zillow showed their house was worth only $1M, and I thought our house would look like a steal compared to theirs. The crypto market peaked, and the stock market was showing signs of following it. Would the housing market follow? Would it only get stronger as other asset classes crumble?

It doesn’t matter.

I stress a lot over not losing the money I won from Twilio, and I was Chicken Little. I saw the stock market having near all-time high valuations and home prices increasing rapidly. I only think about when it will all end. When will people realize that markets can’t go forever?

What’s the worst thing that can happen, though? In any realistic scenario, even if the housing market started to crash, we would still be able to find a buyer for our home at, say, 20% less or around $1.1M. That would still give us a $400k gain on our 6-year investment. We then invest in the total stock market and see a 30% correction, leaving us around $750k.

Show Me the Money

Our agent decided to list our house without telling us at 3 am. We were still concerned about the house next door to us resembling the Addams Family’s and the water in our backyard looking like a Florida swamp. But sometimes, you need a quick kick in the butt. We scrambled to get everything cleaned and mowed and originally had a listing scheduled for Friday, four for Saturday, and one for Sunday. Unfortunately, the one on Sunday was actually a neighbor of ours. It would have been troubling if we sold a house to someone down the street and paid an agent that lives further down the street 30k to act as an intermediary.

I discovered on Friday morning that our house was not on realtor.com, but that was quickly resolved, and I don’t think greatly affected our listing. I was stalking the number of views and saves on Zillow. As of Saturday morning, we had 45 saves and 900 views. Redfin had us as a “hothouse.”

But only four showings the first weekend.

Friday and Saturday were a little cloudy, and we had some appointments moved to Sunday, which was going to be a clearer day. Our one showing Friday said they wanted to make a less than full price offer. Even if it wasn’t a strong seller’s market, I don’t know who would actually accept a less than full price offer the first day they are on the market. However, they seemed to change their tune quickly and gave us a full-price offer Saturday morning.

The only thing good about our first offer is that it was at the full asking price. It came from someone with a home sale contingency; their house was not even on the market. They tried to sell their house two years ago for three months unsuccessfully. Their offer was set to expire Sunday night while we still had two serious showings scheduled. It gave us a lot of anxiety, but we knew that we were still very early in the selling process and wouldn’t panic about turning down a full-price multiple contingency offer.

Sunday became our big day. We had four showings scheduled, and our realtor put a 7 pm deadline on offers to other agents. That quickly turned into two showings.

Our neighbor wasn’t able to see the house until Monda and ultimately never put an offer in. The first showing loved the house but didn’t want to deal with 5 acres of land, smart. That evening we had a second showing, who was actually working with our agent. They were up until midnight putting together a full price but with an escalation of up to $1.35M. It also had no home sale contingency, a 30 day closing period, appraisal price contingency removed, and inspection changes only for health and safety. It was as close to as good as a cash offer as you can get. With mortgage rates the way they currently are, it makes sense to take a mortgage if you can get one.

Not Waiving Inspection

There are stories of people waving inspections in the current market. We actually had it happen on our first Colorado house as the buyer was a home builder and said he was comfortable with the house. So when our current Colorado house buyers said they would limit inspection objections to “health and safety,” we assumed that was just as good as waiving them. But, unfortunately, those words can mean very different things to buyers and sellers.

We received a list of nine items that they wanted to be fixed. Five of the items were minor enough that my wife and I fixed them in a day. Not all of them would I consider truly health or safety, but since they were on their list and I’m a reasonable person, we did them.

The other four were: our whole house fan intermediately working, our water pump short cycling, having an old HVAC, and having an old roof. Again, none of these would I consider “health and safety.” These are structural items to the house that made need repair or replacement soon. We included our deck furniture as part of the sale to help ease inspection concerns and added another $2k off the closing price for the well and fan repairs.

Since this is basically the buyer’s last opportunity to back out of purchasing the house, we didn’t want to pack up yet. Instead, they used all of their two weeks and are causing us frustration to understanding if they really want to buy the house for the price they offered or want a significant discount because the roof and HVAC are original.

I had assumed that the buyers were growing sour on the house and would ultimately walk away. So we offered to repair the roof and provide a 3-year certificate, and that did the trick. They signed the objection resolution, and since they don’t have an appraisal contingency, we were free to move.

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