I used to think selling a house was a near impossible task, always seeing the same homes for sale month after month, sometimes for sale year after year. As it turns out it is not hard to sell a house at all. I have sold four houses in my lifetime and the longest it took to sell any of them was one week. It does take longer with all the paper work, I’m talking about from the time I put the house up for sale until the time I had a hand shake that ultimately resulted in a sale.
The first house I had purchased for 70K. This was my first home and like all my homes and new cars I paid cash. That was the great gift my parents gave me and I repeat it often, they taught me to never buy anything on credit. On my own playing with amortization calculators I came to the conclusion that a 30-year mortgage meant that you pay between double and triple the price of a house over that 30-year span.
I didn’t move out of my parents house when I was 18. I lived in the basement and worked, paid my way through college with cash — I commuted — and when the time came and I had the money and a girl I wanted to marry I bought a house by writing a check at closing.
Hey religious fanatics who hate gay people and blow up abortion clinics: read Deuteronomy 23:19 which states in a current plain-english translation, “Do not charge your brother interest, whether on money or food or anything else that may earn interest.” Why don’t you focus on that cause for the common good and let people exercise their God-given free will?
I retired from General Motors at age 49. I hired in at age 19 and the deal was as a UAW member that I would be able to retire with a full pension after 30 years.
At age 49 I knew a guy named Shelly who sold me on the idea of retiring to Thailand. Wonderful people, low standard of living, you’ll love it. I need to write a whole series of articles about Thailand. Bottom line, my wife Cathy and I visited Shelly who retired to Thailand before I retired and while he exaggerates and cannot really manage his own money, enough about The Land of Smiles was true and we decided to take the plunge.
Selling that first house was sinfully easy. Along with the Thailand notion — people thought I was nuts — Cathy had been saying that the housing bubble was going to burst. House prices had really been skyrocketing and she insisted that if we were really going to move out of country we should do it sooner rather than later. It had also been our hobby to drive around the neighborhood over the years and note that the same 20-some houses were for sale year after year.
Year after year.
This was going to be hard. We started doing research. Bottom line, we identified similar houses to our own that were for sale and not selling, visited them and wrote down the addresses and the asking prices. Then we researched what actually had sold within the last year or so and the prices of those houses. See where I’m going? This is not rocket science.
We put our house up for sale for 105K and our real estate person thought we were nuts and should ask for more. I said I wanted to sell the house in this lifetime and insisted I knew what I was doing. A day after we listed the house a single guy came and looked at the house, liked it, and left. Two days later a young couple came and the young wife fell in love with our kitchen.
Note to home sellers: Make the kitchen look like a dream come true. The husband does not make the decision. The wife falls in love with the kitchen and then sells the house to her husband. We had fixed up our kitchen — for my wife — with black pearl granite countertops and new cabinets, some with glass doors. In the little dining room we had one wall with floor to ceiling glass-door cabinets. We had nice appliances and they were not coming to Thailand. The couple was buying their first home and needed appliances.
The next day our young couple were back with their parents and two other older adult relatives. At the end of a week’s time we had asked for 105K for our home and they offered 108K. There was some banking nonsense where there was a maximum they could borrow on the mortgage and if we paid the closing costs everything was fine so they paid those closing costs to us up front rolled into the selling price.
Let’s break down the numbers:
70K – my investment
105K – selling price into my pocket
35K – profit after ten years (ignoring maintenance and kitchen upgrade)
Fact: If I had not paid cash at the beginning I would have lost money on this sale, having made mortgage payments over 10 years. The first 10 years you are paying mostly interest.
Here’s the ugly truth for our young couple:
108K – purchase price in 2006.
27K – current market value in 2012
Not only did we make some money on our home sale but we dodged a bullet when the housing market went bust. We got out in the nick of time.
Cute little closing note: Right before we left we purchased a set of four cheap glass champaign flutes and a bottle of sparkling grape juice. The glasses we put prominently behind the glass door of a central kitchen cabinet and the “champagne” in the fridge. We figured our young couple and their two little ones could all celebrate moving in with a toast.
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I’ll continue on tomorrow with our other three house sales and conclude with our current place where we intend to stay.