May 21, 2008

"On The Home Front" or "The Dreaded Short-Sale"


Many of you have been asking about our house, and I realize I've left you all hangin' with nary an update. So here it is!
We sold our house!
We're still in it, and we haven't closed the deal so it's not official. But we got an offer, accepted it, and things are going well. That's the SHORT story. And if that's all you wanted to know, STOP READING NOW!!!
For the rest of you who are bored and like knowing numerical details, here's the LONG story: (My favorite kind...)

Two years ago, we bought our home for $250,000. Having just come from San Francisco, we thought this sounded pretty darn cheap. Especially for a whole HOUSE with a YARD!
The MAIN reason, though, was that I wanted to! It was my idea. I was sick of staring at white, unpaintable, rented walls that we weren't allowed to change. I missed having my own house and really wanted a yard and garden.

Final reason? I have heard, my whole life and in numerous books, that BUYING is always a better investment than RENTING.
So we BOUGHT!

Rewind to this past January: We contacted our Realtor Lori. She said that although the housing market had slowed down, our neighborhood had stayed strong and she felt confident we'd get close to breaking even. With the weak economy, we were totally fine with that.

We fixed a few more things on the house, refinished the hardwood floors, replaced the kitchen counters, and called her again in March.

This time she had BAD news. A comparable house in the neighborhood has lowered their home price from $259,900 to $219,900.

At this point, Lori introduced us to the dreaded "SHORT SALE"! A short sale is when you sell your house for LESS than you still owe on your mortgage. (It's getting to be quite common these days.) But first, you have to get an offer and take it to the bank with a "hardship" letter. Sometimes the bank forgives the debt. Sometimes they set up a payment program so you can pay back the difference over time. But ALWAYS they cease any assets you might have and ding your credit BIG TIME!

Needless to say, we were NOT excited about this option. Not because we have any assets to lose (Unless you count student loans) but because of the Credit issue. Our whole marriage we've been trying to protect our credit and both have pretty high scores. This would have put an immediate end to that.

We were also worried that since the Short Sale is pretty new on the scene, there would be unforeseen credit consequences in the future...like when it comes time to buy another house, or even a dental practice.

SO, we hoped for the best but prepared for the worst.
We listed the house for a VERY optimistic $259,900. We had some interest, but no offers.

A month or two later, we lowered the price to $249,900. Nada.

We said good-bye to all hope and lowered it a final time to $229,900 and prepared our financial documents for the Short Sale.

All of the sudden, we got an offer! It was low, but we were excited! That weekend, we had an Open House. Lori told all the interested visitors that an offer had been made and they'd better bring their best offers to the table if they wanted a chance at our DARLING home.

Two more offers came in!
One low, and one...HIGH!!!
We got an offer for $249,900!!!
Exactly what we still owe on the loan! We were ecstatic!

Until we got a call back from Lori.
After taxes and commissions, we'd still owe $19,000 out of pocket.
We fretted, weighed the pro's and un-known con's, and finally took out two more student loans totalling $20,000. (What's another $20,000 more or less?!?)

As of today, everything is looking up! The home closing is set for June 27th. We passed the home inspection and the house appraised for the right amount.

We will have to bring the $19,000 to the table, but will be able to avoid a Short Sale. (Good for us, AND good for the buyers!!!)

So that's the update. Assuming nothing unforeseen happens in the next few weeks, we should be able to close on the house no problem.

Wish us luck!
And if you want to send us pity money, we'll gladly accept it!

15 comments:

The Valentine Family said...

I'm so glad you got a good offer and don't have to go short sale. My sis just bought a house in AZ on short sale and it's been quite the process. Their home in MA still hasn't sold either.

stephanie said...

your house IS darling and i am so glad that you got an offer.

jen said...

i'm so happy for you!!! it could have been a lot worse! congrats and we'll keep our fingers crossed that it goes through:-)

Mona said...

Hope it all works out for the best!

Leslie said...

there is no better feeling than selling a house. we're in the middle of it, too, and feel so blessed that it sold!! congrats to you, dubs.

is your hubby done like mine? where are you guys going? sorry if you posted about it earlier. i'm lazy.

Leslie said...

oh man, i'm really not that dense. i forgot about JAPAN!! how is that possible. :)

Linz said...

Yea! I am so glad that you sold your house! Hooray! I am sorry about having to take out more student loans, but VERY happy that you didn't have to short sale!!! Good luck with closing!!

Sheba said...

Nice re-cap Emmy! Other than the lovely 20k student loan...it sounds like all our prayers are helping. I would like to fast forward to 3 years from now so I can come visit in San Diego.

marissa said...

Congrats! I think everyone should send you their special tax returns to help your cause - oh, but we have to spend ours on fixing Jeff's truck - sorry.

acte gratuit said...

Marissa,
I think that is a FABULOUS idea!

Jessi said...

What (mostly) happy news!! I'm glad that things are working out for you.

Shelly said...

I'm glad your burden is gone.

whitty-acres said...

i'll send you five bucks to soften the blow!!!

congrats dude.

Anonymous said...

congratulations on selling your home. we are in the slow process now and still no luck.

Brandoneous said...

Realtors are evil.