Yesterday, we sold our house for a million dollars. So why do I feel so poor all of a sudden?
The series of events that ultimately resulted in us joining the millions of Americans priced out of owning property seemed to happen with breathtaking speed. But I suppose that it’s really a cautionary tale about how quickly how a lot of apparent equity in a house suddenly, well, isn’t.
The story really begins with the realization several years ago that we weren’t making a particularly good living running our graphic design and photography studio. The large, lucrative projects that were our stock in trade during the ‘90s and early ‘00s had vanished from the landscape, and the field was being populated by young programming types that were more coders than designers, and companies were increasingly inclined to bring their creative projects in-house. We had a fairly large nest egg, which was eroding at a rapid rate. At that time, the market was not favorable to selling the house, and both our children were still living with us, so we decided to wait on selling the house.
This past spring, it felt like the planets were beginning to align towards time to sell. One of our sons had already moved out, and the market was coming back. Daily, the media was full of stories about houses with multiple offers selling for more than the asking price. We met with our realtor and set a price a fair amount north of $1 million. Quickly, I set about painting stair railings, replacing window screens, doing some landscaping and getting the place ready to put on the market. One month later, we held our first open house.
We thought “well, we should be able to buy a place for around $550,000 and put down half as a down payment, and lower our mortgage by a lot.” So we went and looked at open houses. That amount didn’t buy much in San Rafael, but in Novato and particularly Petaluma, it went a lot farther, and we began to get in touch with what we wanted in a new home.
Many weeks, and open houses, came and went. Each Sunday, we’d drive to Trader Joe’s, stock up on fresh flowers, and put stuff away in preparation for the day’s open house, then pack up the dog and head north towards other open houses. And each week, we’d find that only three or four people had come to our open house, and none was interested enough to make an offer. We came to the conclusion that we had priced it too high and agreed to lower the price by nearly $100,000. Meanwhile, the $550,000 houses we had been looking at became $450,000 houses and we were spending more time in Petaluma. More weeks went by. Again, we reduced the price, and in the process, what we could afford. Discussions with mortgage consultants revealed that we hadn’t made enough money to qualify for much of a mortgage, and a new strategy was born: We would pay all cash for a manufactured home.
We really liked this mobile home community in San Rafael that featured a lagoon in the center, and in particular, one home that sat in a prime spot on the lagoon with a palm tree in the front yard and an endearingly weatherbeaten white picket fence. It was suffering from deferred maintenance, but seemed within our reach. We kept our eye on it, knowing that it wasn’t being held open due to challenges relating to its elderly owner. Then two things happened…we received an offer on our house, and we found out that an offer was being made on the manufactured home we wanted, and we would have to act quickly and decisively if we wanted to buy it, meaning we needed a pretty strong offer to assure us of getting the house, so we put in an offer for just over asking price.
The offer on our house (the only one we had received in four months of being on the market) was disappointingly low, and we countered back and forth until arriving at a figure that left us with just enough to buy the manufactured house and renovate it…if it didn’t need tons and tons of work. Meanwhile, our buyers had ordered several inspections and were awaiting the results of them. Once they came in, they indicated our house needed a lot of work itself, and the buyers reduced their offer for our house by $75,000.
Our realtor insisted we accept the offer anyway, as there was no assurance that we would find another buyer very quickly, if at all, so after some thought and painful discussions, we realized that we were substantially short of having the money to purchase anything larger than a Tuff-Shed. We became renters after 33 years of being homeowners, and soon found a house in Bel Marin Keys that we could afford.
It’s okay. We will have some money in the bank, we can pay off our credit cards and doctor bills, and have plenty left over for stuff like buying a kayak. And in this next part of our journey, we will learn how to live within our means.