Home Buying & Selling Logistics and Lessons for Newbies and Novices

I have been promising some more information on the home buying process for a while now. To quickly recap the past, we tried selling our old home for a little over a year. We started out listing the home for what we purchase the home for, $120,000, in 2003. We used a Realtor, against my better judgement, and the he was horrendous and lazy. To read more on our experience with Realtors, read my post Using a Realtor to Sell or Buy a Home. To make a long story short, we went For Sale By Owner with a flat fee MLS listing with a new Realtor after firing our previous Realtor. We lowered the price several times, at which we were finally at our rock bottom of $99,000. The market area for our old home was really tough because 1) there was at any point 600+ other homes to compete against, 2) the schools are not the best, and 3) I purchased the home during the peak of the housing market. However, I thought there were some things that could work to our advantage.

The home was a newer construction home, built in 1995. The house was a three bedroom colonial with 1.5 bath, and it was all new with modern amenities. The couple that used the home prior to me took impeccable care of the place, and for the money, it really was the best option for me. I was young and single and it was way more house than I ever though I would need…I thought. So I assumed buyers would also agree that in an older neighborhood, newer construction would be welcomed.

In addition, we had made many improvements to the home. We added central air and updated the heating system since it was older and inefficient. We gutted the upstairs bath due to some water damage, dating, and carpenter ants, and completely updated with modern finishes. In addition, we gutted the covered front porch and replaced with composite, low maintenance boards. Both the bathroom and porch were things we felt needed to be done to sell the home. They were really not in good condition, and rather than trying to negotiate repairs during the stressful closing process, we took the lead to have them repaired. In total, we stuck around an additional $10,000 into the home over the past 8 years. Our initial opinion was yes we would never see the $10,000 in improvements, but possibly it would put our home ahead of other properties out there and get it sold.

Our assumptions appeared to all be fallacies, because the house never sold. We still honestly are quite baffled why the home did not sell. For a sub-$100,000 home, there was incredible value for the money compared to surrounding homes. In addition, we did not stand to make a dime on the property. By the time we would have paid closing costs, we still would have probably had to bring money to the table. It was completely discouraging knowing that we had done everything right, and stood to make no money on what was our most expensive purchase at the time. It was tough to compete though with 600+ other properties, especially when lots of them could even be had for a fraction of what we were selling for, and we were not even close to being overpriced for the area.

My wife and I had open houses, took ads out in the newspaper, and barraged the internet with our listing information. As soon as we dropped the price under $100,000, interest peaked, but no one ever brought an offer.

We were working with another Realtor to 1) gauge how we should be pricing our home, and 2) to get the latest listings on the MLS that met our search criteria. In late May 2011, we found a home in a community that was really interesting because it was extremely architecturally different than your typical box home. We went and saw it on a Sunday open house. After seeing the property, while really interesting, we could not see ourselves really living there. The search though sparked a real excitement in my wife, and she came home and searched the MLS for other properties. She found another really promising property, but the listing information on the MLS was very limited. So we called the listing agent to schedule a showing.

As it seems typical of Realtors, we did not hear back from them that Monday. Finally near late afternoon, after a second call to the listing agent, we were able to secure a showing that night. To read the rest of the purchasing story, read my posts Our Hectic Week and Big Secret Revealed and So What Happened to Our Offer.

In my next post, I plan to get into more of the specifics of the transaction during the closing process.