How to Buy and Sell a House

December 5, 2011 by 2 Comments

Ryan has kept us up-to-date on his adventures building a house. Eric and I recently experienced another side of the equation: we sold our house in New York and bought a new house in Iowa.

We have some prior experience with this process. We have bought four houses and sold three during our twenty-four year relationship. We bought our first house in Northern Virginia in 1989, just before we got married. The interest rate was 10.5%.  According to the flyer that we received from the selling agent, who was also our agent, we paid more than anyone else in the neighborhood had previously paid for a house there, ever. Yeah us!

When Eric got transferred to Idaho in 1991, we tried to sell it but the housing market had fallen and we were under water. We eventually sold it at a loss, after renting it for less than we were paying on the mortgage for about five years.

We did a little better on our next house, but not much. We bought it in 1992 and sold it in 1993 for the same price. Luckily, Eric’s employer paid the realtor fees so we didn’t lose too much money.

Having learned our lesson — you need to be in a house for awhile if you want your investment to pay off — it took us some time to get back into the market in New York. We moved there in 1993, but did not buy a house until 1999.  Luckily, its value nearly doubled during the twelve years we owned it. When we refinanced in 2002, we also put more money down at a time when many homeowners were taking equity out of their properties. We would have paid for the house completely in less than four more years had we stayed.

With that much equity in the property, we were able to put down a very sizable up-front payment on our Iowa house once we sold the New York one. So that’s how it’s supposed to work! Here are some other things I have (re-)learned about buying and selling an existing home:

  1. Work with an experienced realtor. They are professionals and they know what they are doing. The realtor will keep your expectations in check. They do most of the work and make everything easier. They know the market and what is out there.  They are also a buffer between you and the people who are touring your house and making snap judgments about your decorating choices and budget priorities. Being judged is bad for the soul. Also, if you are buying a house, make sure you have your own agent, someone who represents your interests and not those of the seller.  Eric and I strongly recommend the realtors we worked with: Mary Anne Hess at Coldwell Banker Prime Properties and Sue Mears at Mid-America Group Realtors.  You may get lucky using a for-sale-by-owner approach, but it puts an undue burden on you, the buyer, and the buyer’s agent if you do so, since there’s no way you’re going to know all the ins and outs of the legal, contractual and civic requirements associated with major property transactions in your market. You get what you pay for, especially in this situation.
  2. Buyers want the latest updates. A friend told me recently that she and her husband were updating their kitchen because they planned to sell it in a few years and move to Florida. This sounded crazy to me. Why spend all that money to put in features that you will not have a chance to enjoy? So it will sell faster, of course.
  3. You should fix the stuff you know is a problem before you put your house on the market. Every house has issues. You know better than anyone what the issues are with your house. Don’t wait for the home inspector to tell you what you already know. Just fix it.
  4. Don’t waste too much time looking at houses that have been on the market for months, unless you want to buy a fixer-upper. Houses that have been on the market aren’t selling because there are too many things wrong with them.  At least in the markets we have been looking at, a house that has been on the market more than 90 days isn’t selling for a reason.  We stopped looking at them to save time.
  5. If you are not sure what you are doing, ask for help.  We should have asked our parents and older colleagues for advice when we bought our first house. I am not sure why we didn’t, probably because we thought we were smart enough to figure it out on our own.
  6. A house is an investment, until you live in it awhile, and then it becomes a home.  Don’t fall in love with a house until you own it. Don’t pay more than market price for a home because you think it is your dream home. If a house is priced right, it should sell for about 95% of the asking price, so you need to start there or below there if you don’t want to pay too much. While it is true that your monthly payment won’t go up by much if you overbid $5,000 for a home, you will notice that $5,000 when it comes time to sell the house.
  7. Don’t buy more house than you need.  Buying a house is a big investment. There are many other investments that you need to make in your life. You need to save for your kids’ college and save for your retirement. You also need to enjoy life along the way, because there are no promises that you will ever make it to retirement. If you buy more house than you need, you are putting too many eggs in one basket and short-changing those other investments (unless you are among The One Percenters).
  8. It’s the interest rates, stupid!  We thought we did well when we refinanced our house in New York at 4.6%.  The rate on our house in Iowa is 3.2%. That is a lot of Cheetos (which is what Eric and I call things we impulse buy).  If you are sitting on the sidelines wondering whether it is a good time to get into the market, you should act now and buy that house.  Interest rates are already starting to go up.

I don’t plan on selling another home soon, and hopefully never will again. I hope Katelin likes this house because we are seriously thinking about handing her the keys, if and when we decide to move on.

Here it is: our new house (and home) in Des Moines . . .

Filed under Albany, Family, Iowa Tagged with , , , , , ,

Moving Along With Moving Along

September 26, 2011 by 18 Comments

This week is Marcia’s last in her current job, and she will be heading west to Iowa next Thursday, picking up Katelin en route so they can keep each other company through the long drive and first few days in Des Moines. I’m glad things worked out that way, schedule-wise, for both of them.

Our new house in Des Moines.

Marcia will be living in a furnished corporate apartment for the first six weeks or so, while I remain in Albany to take care of various local and regional things that I need to get done before I’m able to join her. If all goes as planned, my last day of work at the University at Albany will be November 9, the packers and movers will take care of clearing our current house on November 10 and 11, I will head west on November 12 (with the cats), arrive in Des Moines on November 13, with closing on our new house (photo at left) on November 14.

Between now and then, I will also be serving in my volunteer capacity as Secretary of the Corporation for the American Institute for Economic Research at their annual meeting, and as reunion coordinator for my Naval Academy class at our 25th anniversary homecoming. I will also be attempting to maintain a small and tidy footprint in our current home, to facilitate selling it soon. So it’s going to be a busy six weeks.

Of course, that period of time is still going to seem somewhat empty to me, since I’ll be alone at the house for much of it. While a six week separation for Marcia and me is nothing compared to what many of my Naval Academy classmates and all of our fellow soldiers, sailors, pilots and Marines endure as a matter of course, it is pretty dramatically outside of the family paradigm to which we’ve become accustomed, as we’ve never been separated for more than a week during the past 24 years.

So I’m advance planning on how to amuse myself during that time to make it go more quickly. Those of you who know me or have read my work over the years are probably aware that I have a fairly deep masochistic streak. Not in the sexual sense, mind you, but rather more in the monastic/ascetic/penitent/endurance athlete model of the word. I often like to push myself to the point of discomfort to see how I manage it, because I believe we learn things about ourselves that way. For example: is it possible for a reasonably fit person to lose 30 pounds in 30 days? Answer: yes, which I know because I’ve done it, though it was a long, long month. What did I learn from the experience? That I never, ever, ever want to gain weight to the point where I feel like I need to lose 30 pounds again. 16 years later, I never have. Mission Accomplished.

So, my planned self-betterment schemes for October and November currently include:

1. Eating The House: You know how you often buy food items on a whim, or when planning some meal that never quite comes to pass, and then they sit in your cupboards for months, or (sometimes) years? We have a good number of those sorts of items about. So, starting October 7, I will not spend a penny on food until I have eaten every bit of food in the house. (Within reason, of course: I’m not going to drink a bottle of Tabasco Sauce straight up or eat a bowl of ground cumin, but rather will be focusing on living off all of the end product dry, canned and frozen goods in the house). As an adjunct to this, my fighting weight for the past several years has been in the 208 to 212 pounds range, and I’d like to see what I look like back under 200 again, since the last time I was there was in 1995, after dropping from 227 to 197 in 30 days (see above). So I’m sure I’ll come up with some extra uncomfortable physical activity to facilitate that piece.

2. Living Off The Stuff: My last paycheck from my current gig will come sometime in late November, and I’d like to be able to put away all of my earnings from October and November to provide some buffer and safety net for the first couple of months in Des Moines. Toward this end, I will be attempting to live completely off money earned or collected outside of my salary and benefits. For example, I plan to hold a CD and DVD sale of the “Three bucks per disc, 10 discs for $25, and 25 discs for $50″ in my garage some night in October. I guarantee you that my collection contains a lot of stuff that you’re not likely to find elsewhere, especially at those sorts of prices. I have a restored vintage ARP Solus analog synthesizer that I’ll be selling too, and I’m going to start re-activating some of my paid freelance writing relationships over the next couple of months. Finally, there will be The J. Eric Exotic Escort Service . . . okay, just kidding on that last one. At bottom line, though, all discretionary activities until I arrive in Des Moines (to include gas for getting around outside of work responsibilities, and food, once I finish eating the house) will be funded through such additional income streams, which will also help me de-clutter in advance of the move.

3. One Bag Out Of The House A Day: Some de-cluttering can’t take place through selling stuff, but rather needs to be taken care of by chucking or donating things. For my last 30 days in the house, I want to have one large garbage bag’s worth of stuff (or a similar volume, for items that don’t go into bags) leave the house each day, either into a dumpster, a Salvation Army collection bin, or someone else’s home, in the case of items that can be directly free-cycled that way. I used this approach in a facilities job I had once, and it was amazing how much we cleaned the place up just by forcing ourselves to look for the things that really could go, right now, rather than seeing them and thinking “Well, maybe someday this might could possibly of some use, to someone . . . “

I’m sure I’ll come up with other games to play to amuse myself, but these are the ones I’m planning at the moment. Watch this space for updates.

Filed under Family, Food, Iowa, Philosophy, Psychology, Travel Tagged with , , , , , , ,

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