The last two weeks, I have given you some tips to sell your home. My husband is a retired General Contractor and we have bought and sold properties together for about fifteen years. As you know, things have changed drastically in the real estate market and people need REAL help. That’s why I am calling today’s article “Reality Check 101.” Next week, the article will be called “Reality Check, 102!”
My purpose today is to share with you the experiences my husband and I have recently had selling our home and a rental property.
Today’s market is not “life as it was,” but I imagine it will be “life from now on…” or at least for the next five years. Home sales have increased in the nation, but it is because people have become more realistic due to circumstances beyond their control. Lending institutions are stricter in lending no more than the appraisal price demands, based on square footage. The secondary housing market is definitely a buyer’s market; the seller can price and receive offers higher than the appraisal comes in based on sales in the neighborhood (“comps”), but the buyer will not be able to borrow more than the appraisal price.
In our situation, we worked with a realtor we trusted and had used several years before with a rental property. She broke the news to us what the comps came in at—about $50,000 less than what we had paid for the house! Ouch! Two houses in our neighborhood had been sold at rock-bottom prices, and they weren’t even foreclosures. One of the houses had been “for sale” for over a year. The owner even took it off the market for a few months. Her desire was to move to the coast and take advantage of the super low, short-sale price of a particular condominium right on the beach. She decided to take a big loss on her home—and yet gain on the other end, buying the condo at such a low price. (The other neighbor was a friend of hers and also bought a condo at the beach!) If you are investing in another property and getting “a steal,” it isn’t as hard to sell low.
The problem Workampers face, is that they aren’t necessarily buying a new home, unless it’s an RV. [There is an art to buying RVs for much, much less than the MSRP, but that’s for another article!] If you are buying another home for your domicile, you are probably downsizing, so looking at the Big Picture, the bite in the seat of your pants can be assuaged by getting a great deal on the other end as a buyer. However, we were not buying another home—only renting a site to maintain our Florida domicile.
We decided we would not start out asking as low a price for our home as the other two homes that had recently sold. Why? We just knew our home was nicer! Truly, we had replaced all our appliances, light fixtures and plumbing fixtures, and had hardwood flooring in most of the house. We also had a sun porch that was original (not added on), plantation shutters and Corian countertops everywhere. Our house had been the “model” house in the neighborhood, so it had extra molding and other features. We also were on the corner so we had more privacy and backed up to a pond. Our realtor had done a great job with a photo tour on MLS and held an Open House the very first weekend. Even though our sale price was somewhat higher than she advised, we were thrilled to get an offer at the Open House! After countering, we arrived at a figure that was $5,000 less than our asking price. The buyer asked for certain pieces of furniture to be included, and we agreed to most. The price we settled on was about $15,000 more than the other two homes had sold for, so we were satisfied, although we still were losing from what we paid for the house. Fortunately, our house was paid for, so we weren’t upside down or anything.
Here comes the reality check. Two or three weeks before closing, we find out the lending institution would not lend our buyer (a lawyer) the 80% he had asked for. Even with 20% down! The buyer expected us to decrease our sales price by $14,000. It was a real struggle, knowing he had thought it was worth the higher price and had the means to afford it—so we took a step back and didn’t panic. Finally, after a week’s time, he agreed to split the difference 65/35%. He paid the 65% difference. We were fortunate he was willing and able to do that, or we could manage to accept less than we anticipated. Had we rejected his offer, we might have had “carrying costs” (overhead until the house did sell) and maybe still end up the same conclusion, or been worse off. In order to fulfill our dream of fulltime workamping, we had to have an attitude adjustment.
Reality checks often have to do a lot with perception and attitude. We changed our perception by choosing to look at the big picture. We had lived happily in the home for seven years. The days of living in a home “for free” due to selling at an appreciated price could be gone. We decided to look at the positive: there were two things to make us feel better about the depreciation. First, we had downsized seven years before when prices were at their peak and we had made over $100,000 on the sale of our prior home, which allowed us to buy our motorhome. Then, we averaged out the monthly cost of living in the home for seven years and realized we came out ahead of what renting such a home would have cost.
The next task we had to accomplish during our month’s sabbatical from workamping was to sell an investment property we owned in Round Rock Texas. We no longer had a purpose of owning a home in Texas (write-offs for managing the property while visiting our children living there). Things were beginning to be a hassle, since our other investment properties were in Florida and we were being spread too thing. The neighborhood was failing and we didn’t know if prices would continue to fall or climb back up, but we had to focus on our objective: to enjoy the freedom of Workamping. Rental property is an excellent investment, especially if your husband can make most repairs, but the house was getting to the age that major expenses were to be expected: appliance replacement, fogged windows, roof, a/c, etc., and we didn’t want expected “unexpected” expenses to be worried about.
Our experience with the sale of that house has, I think, some valuable lessons, but due to my rambling, I will continue with “Reality Check 102” next week!
Mary Lou Merritt
At The Workamper News Forums Site:
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- “FOX NEWS VIDEO ON WORKAMPERS” – was it accurate? Weigh in at the General Workamping Forum.
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- Solos – you might find a Workamper partner at the Solo Workamping Forum.
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Jaimie Hall Bruzenak
Deadline to become a GOLD LIFETIME MEMBER approaching!
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What’s Happenin’ In the News
Michigan Recreation Passports
The Recreation Passport has replaced motor vehicle permits for entry into Michigan state parks, recreation areas and state-administered boating access fee sites. This new way to fund Michigan’s outdoor recreation opportunities also helps to preserve state forest campgrounds, trails, and historic and cultural sites in state parks, and provides park development grants to local communities.
Michigan residents can purchase the Recreation Passport ($10 for motor vehicles; $5 for motorcycles) by checking “YES” on their license plate renewal forms, or at any state park or recreation area. Nonresident motor vehicles must still display a valid nonresident Recreation Passport ($29 annual; $8 daily) to enter a Michigan state park, recreation area or state-administered boating access fee site; these can be purchased at any state park or recreation area, or through the Michigan e-Store at www.michigan.gov/estore.
To learn more about the Recreation Passport, visit www.michigan.gov/recreationpassport or call 517.241.7275.
More than a week ago, the 7,000 square foot RV Museum opened to the public. Owner Sisemore said he has been building the museum for over 25 years, and listed some of the greats: a 1936 Alma, a 1937 Elkhart Traveler, a 1953 Fleetwood. The list goes on. Not only those, the red and white bus that characters Travis and Mary Jo Gornicke drove in the movie “RV” is even on display. Jay Leno is said to have the same model! More than 4,000 visitors have already visited the museum at 4341 Amarillo, TX at Sisemore Traveland. To go to their website, visit www.rvmuseum.net and you can see some of the RVs from the past.
What’s In a Name? The possibility of a Law Suit!
The name “North Carolina” was in dispute as the name of an upcoming RV show taking place at the Raleigh Convention Center, North Carolina. After AGI obtained a Restraining Order, Apple Rock—the advertiser and promoter of the show, was forced to rename the show the NCRVDA Show which is to be held January 20 to 22, 2012.
Bisbee, AZ Trying to Eliminate Permanent RV Living
BISBEE, Ariz. — During Thursday’s meeting, members of the Bisbee Planning and Zoning Commission discussed an amendment to the city code regarding the use of RVs and travel trailers, in hopes of eliminating the use of RVs as living quarters, reports the Sierra Vista Herald.
Community Development Director John Charley proposed an ordinance that would set concise regulations on length of use, the permitting process, the use of utilities and the establishment of a permit fee, reports the Sierra Vista Herald.
The Sierra Vista Herald reports that the draft ordinance prohibits the use of an RV for permanent occupancy.
For the complete story from the Sierra Vista Herald, click here.
Tampa RV Show Sets Attendance Record
A new record of 54,000 attendees over five public days was reported today, according to the Florida RV Trade Association. That is approximately 900 more than last year’s event. Dealers and manufacturers reported excellent sales, which is usually a precursor to the entire RV industry nationwide. The dates for the 2013 Florida RV Super Show is January 16-20 for the public; January 15th for the RV Industry. For more information, visit www.frvta.org.
A spokesman for ARVC said despite the economy and political situation, the worst is over as things are better than two years ago and the outlook is positive.
Attention Super Bowl Fans
The Indiana Dept. of Natural Resources reports “available, affordable and nearby” facilities at Indiana’s State Parks and State Park Inns for those coming to Indianapolis for the event. Go to Camp.In.Gov to find out more.
That’s It for Now, Friends!
Mary Lou Merritt