It has taken awhile but I thought that it was time to share my experience or adventures that I have had with my family this year as we made the move to sell our home and relocate to another home. In hindsight, I am pretty happy we made the tough decision we did and am so grateful that despite the challenges that we endured, timing was almost perfect given the way the uncertainty now surrounds the housing market given the crisis currently at hand around the world. While it was in my mind during the later stages of the process, I never had a large concern that the health issues would make the move not happen but the reality was that it was only days away of a totally different outcome!
As I had previously shared, the family made the decision early this year to explore the potential to sell our home and rent another while we decided what our next steps would be here locally or elsewhere in the world. Given my awful previous experiences with Real Estate and timing, I had been growing very cautious about the current housing market and having a property with some equity made me consider alternatives to improving our overall financial condition by reducing debt and becoming less dependent on banks in the future. I had seen how hot the local market had been recently as prices had seemingly increased with little inventory available at any point in time.
I started my research online with all these data points and after exploring with a real estate agent in 2018, my initial concern was the amount of commission needed to be paid to sell a home. 6% of the selling price seemed pretty high and a relatively large part of the equity that would be better spent elsewhere. My first step was to weigh my options in this front. I had read about alternatives where the commission was reduced significantly for less services provided to market the property. I thought that the market was hot enough to make a good sell without these services. However, after researching more closely, I had read some bad experiences of not using the traditional model.
I then found an option that a famous online provider would actually evaluate your property and make you a cash offer within days. Given the avoidance of using an agent, I thought it would be interesting to explore so I signed up and requested an offer. I knew it would be lower than market value but my thought process was that I could give up to 6% off the value and still save on commissions. However, not only did the offer come in 10% below what I would ultimately list the property (7% less than selling price) but they also wanted almost 10% for fees on top of the underpriced property! I understand that the risk they bear is large given the lack of diligence on the deals but I thought that was way too much.
As I considered the last alternatives of just calling an agent to go through the process, I actually got an email from my lender which provided a “discounted” selling service with agents. Since I had not yet gone through the process, it was worth a try to save up to 2% through their agents instead of the ones I have seen in the area. I immediately got an appointment to discuss the process and assess the market and home to start the selling process. Only a few days later, we were on the market with some awesome pictures done to update the listing!
Within 24 hours, we had 7 appointments setup to visit our property which were done only 2 days after listing. No further proof of the hot market came for us when a day after the appointments were made, we received three offers. This is when the journey got interesting as they were all different. One was at full price with a 30 day close while another was for $5k below listing. The last was $10k below listing. We obviously went with the highest as all were pre-approved although the timing was concerning given we had no place to really go as we had not thought it would be so fast. Our process had just been accelerated so we started our own search for a place to live which was even more eye-opening.
The inventory of homes in the area we were looking were extremely limited with less than 15 options available the first day we started and only about a dozen more added to the market in the weeks we were searching. In addition, it was clear of how hot the market was as many of the attractive ones were getting offers just as aggressively as we had saw in our own home. We saw ourselves stuck in the middle of selecting whether to wait for something better or risk losing something that was sufficient for the family.
As we started through the process of searching for our home and the packing of our belongings, the process our sale was just starting. The first step was a requested inspection made by the buyers of our home. We were very comfortable with the inspection as most of our home had been well maintained if not remodeled over the last couple of years. It was probably also why we received so many offers despite being at the top of the range of other properties in the market around the same time. Even after the inspection happened, the agent was confident that it would be a seamless process… until it wasn’t!
The inspection report was my first reminder of why I honestly hate Real Estate as an investment given how objective some processes may be. The inspection wet so granular that it pointed out screws missing on wall mounts for the TVs! Not only did the long pages of the inspection presented every flaw of the property but the estimates to fix them all were so inflated that they asked for a $10k credit for the sales price! This was ironically unacceptable to me given the other offers that had come up in so little time. However, as we had started the process, we discussed options with the agent and decided to go half way an offer a $5k credit. Unfortunately, it was not accepted so we were basically back to square one. However, it was still only a week after starting the process.
Given the interest received from the original visits, the agent did some good work and found that one of the previous parties was willing to keep their offer without requesting another inspection! Given that their offer aligned with the price we were willing to accept after the inspection, we got another signed contract only 24 hours after the first deal fell through! I insist that the market was so hot that these stories are so incredible; particularly knowing where we at right now. After a couple of days of answering questions and letting the new buyers visit the property, things started to move really fast. Our time was spent packing and visiting properties to make a decision quickly. One decision we had made was to pack ourselves and do the move with family over a weekend to save some money. After quoting a couple of movers, it was incredible to see how much some were asking for despite being one truckload and what we expected to be a move within a 5 to 10 mile radius! I hate really putting a price on those that provide services but gong through the moving process myself allowed me to consider making this decision which would come back to be a stressful one by the end of the journey.
About a week after the second contract was signed, we had yet to find a place to move to so we needed to broaden the options and found a couple of alternatives in a certain community we liked although a little further from the area initially chosen. We visited a property that was not perfect but would do well for us in the short term. After a second visit, we decided to make an offer at the rate they had offered but after a couple of days of no response or progress, we had the agent figure out what was going on. It happens that the owners had listed the home for both rental and sale; while considering the offer, they had unfortunately decided they prefer to sell the property instead of rent it.
This happened with less than three weeks to our closing date! That is when the stress was just getting started as we had no clear view of where we were going to live with only two weekends before our closing date. Fortunately, we looked at the community closely and there were other properties very similar to the first one so we made a couple of visits the next weekend with the decision to make a quick offer immediately when chosing one. While we were able to find a place, we also found out that the community required an approval for tenants before they could move in! This put the stress on a completely new level as the required time for approval was 15 days which was beyond the time of our closing date!
What became clear is that the final weekend before the closing date on our home sale would likely not be the date we could move and count on the help of the family to move our belongings to the new home given the needed approval. Therefore, I also needed to have an alternative plan to move our stuff without the help of family given that it would likely occur on a weekday. While we continued our packing which ended with about 45 boxes, the uncertainty around how to actually move them was stressful. The Friday before the last weekend confirmed our fears as the approval had not been received so I had to get back to quoting a moving company to move within a week’s notice!
While we awaited our approval, the home sale continued forward as documentation continued to be gathered. While it was relatively straightforward, we had two uncomfortable situations in our process. First, the HOA of our home had an outstanding violation on our records which threatened to close our sale. It was a very old issue with the driveway which was fixed but required an inspection before lifting. While that was resolved quickly, the last challenge was the result of the Appraisal which came in lower than the sales price. This was a large challenge as we had already reduced the price after the first offer did not go through. However, the new buyers did not have a reduction considering we accepted the lower offer.
The negotiation of the updated price was interesting as the market was seeming to be changing very slightly for me. On one end, we had seen a very aggressive market with many homebuyers available in the market. However, this was also our second contract and now having a lower appraisal was just showing how crazy the market had been leading up to this deal. Not closing on this contract would mean that a third offer would probably only begin around the latest appraised price. Even looking at the comparable showed that my property was well priced and was probably in higher demand given its great appearance, maintenance, and location relative to others in the market. In addition, the health crisis was just starting to make news here in the United States. These considerations made me make the difficult decision of dropping the price again which was ironic because it was the price I had not accepted in the first contract!
With that finally being settled, the pressure to move out was even more important. With five days to close on our home sale, we finally received approval to be a part of the community as tenant. However, some items needed to get done in the property before moving which forced me to change the move date once again to one day before our close which would leave very little time in between the transactions. With no option, we continued to pack our belongings for the move at the end of the week. Luckily, the moving Company was relatively flexible and adjusted to our needs.
The night before the move, we finally got the keys to our new home which made the move feel closer than ever. Very little sleep occurred that night as we prepared our items for an early start as the idea was to start moving items in our own vehicles to get the process started before the moving Company got started. The first load of items started at 6:30am as we started early for a head start. We needed to make sure we were out that night as the final walkthrough by the buyers was the next morning at 9am before the close! By the time the movers arrived, we had made three trips between homes and took about 30 boxes along for the ride!
It turned out to be a great idea as the movers barely had space on the truck but the time is was all loaded and on the way to the new home in the early afternoon. The experience with that day until that point was how things are always meant to be as the family and I would have never been able to be as sufficient with our own truck. It would have taken multiple trips and some uncomfortable moving of furniture which proved to be challenging for even the experienced movers I had hired for the process. In between of the movers unloading our belongings, I made two additional trips to the home to start cleaning and getting ready for the walkthrough. By the time I got back with everything left from the old home, the movers were just wrapping up; leaving us for the challenge ahead of unpacking and organizing it all!
However, before we could rest, we still needed to get back to the home and clean a bit before closing the next day. We spent the evening cleaning and a little painting only to realize we still had a problem. We left the televisions on the wall until the movers came so we now had holes on the walls that did not look very good. My risk averse mentality had me concerned considering the walkthrough and close the next day as financial markets were starting to collapse given the health crisis just beginning here in the United States. Although interest rates were probably great for the buyers, a risk of losing the sale at this stage for me was concerning as I had just moved to a rental as well. Fortunately, I was able to get the handyman I have worked with in the past to do a late night patching up of the wall before the walkthrough the next morning.
I cannot recall sleeping the night of our move until our close which was done separately from the buyers but the weight off my shoulders by noon that day was great. I then awaiting anxiously the wire transfer of the funds from the sale as the afternoon progressed. As the afternoon continued with no news, the weight was back. I then got the call from my agent although not what I wanted to hear; the closing documents from the loan company were wrong and could not be updated in time to close that day. Unfortunately, it was a Friday which made for a long and stressful weekend considering what could happen with the markets being volatile. It only got worst as the bottlenecks in the mortgage industries were apparent as the documents could not be completed until the following Wednesday when the close finally was executed.
The amount of emotions that I experienced those days were incredible considering everything that was happening. The electricity and water were down at the old home while I had to continue moving cancellation dates with insurance to remain covered. The thoughts of having to hold on to the properties for an extended period through a potential health, financial and economic crisis were stressful! However, once the close was completed and the funds in my account, it quickly turned to a sense of a large cushion considering that I have may very well timed the top of the market! In fact, I may very well be in the drivers seat to not only negotiate fixing my existing issues with other properties, but can get some attractive home pricing for rental or purchasing in the future!
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