Long term planning of selling your home?

[plowhog]

Just kind of really stupid pricing out there...

It's easy to make that kind of comparison of a price "today" from what it was in the past.

Long ago, in a fabulous neighborhood, I set the all-time highest price ever paid for a residential home in that area. Yes I paid top dollar. Oh how I wish I kept that beautiful property. You could easily add $1M onto its value now. So "now" price is $1M over "then" price. But it is comparable for the neighborhood today.

Savvy buyers don't compare now versus then. It is relative value of "this property" versus "that property." There is a great deal that goes into such an evaluation of "this one" versus "that one." Most people don't go to the depth necessary to do a thorough evaluation, and too many get swayed by factors that are sometimes impulse driven.

When my wife and I decided to flee from CA, we decided on an area to relocate to. We made a list of 15 factors desirable in our new home. It was a mixture of "must haves" and "highly desirable."

I searched hundreds of properties, helpful since I have MLS access. But we also looked at 100+ properties in person. Some were ruled out with a drive-by, others got deeper consideration. After 4 years of looking, we bought. The location we decided on checked 11 of the 15 boxes. Having the identified criteria (15 items) was very helpful to keep us "honest" when evaluating this vs that property.

Many would consider our efforts to be massive overkill. But I am really glad we put the legwork into our shopping. It has paid off and we love our home. And, it has been an excellent investment.

 

[ultrarunner]

Popcorn Ceilings here are a big deal… some have them tested but they do eliminate potential buyers.

Your home is new enough not to have old house problems which is a good position to be in…

Most of what I work with is 60 to 100 years old which covers a lot from electrical service, galvanized pipes, lead paint, asbestos, popcorn ceilings, etc…

 

[Sigarms]

It's easy to make that kind of comparison of a price "today" from what it was in the past.

No, I really do get it.

Out of curiosity, I took what we paid for our home in 2005 and added in the "dollar inflation" factor 19 years later. Honestly, with the rate of inflation add in, although I was hoping to break even for what I paid for the home in 2005, I don't think with the land added in we have a problem breaking even with the rate of inflation over 20 years later even with the rate of inflation added in looking at the comparable’s even in my rural “cheaper market” than other markets.

That said, I was never a economics guy, but the field always kind of fascinated me. Perhaps the housing market has other variables involved. What’s interesting is how the housing market can easily surpass the rate of inflation over the years.

My father bought his first and only house when he got out of the service in 1978 (he got out around 1975, but we lived with my grandmother to basically watch over her until she passed as my grandmother took me and my mom in while my dad was overseas in the SE Asia “conflict”). My father paid 28K for that 1,400 square foot house in 1978. He sold that house in 2018 for 165K which I thought of as being stupid money even back then (2018). Here is the thing though, looking online, that same house looks to "value" at about 265K now (which far exceeds the annual inflation rate), and that's a 100k increase in only 6 years vs the homes value increase from 1978 to 2018. Go figure.

Luckily I was never business smart to have a "make a killing" attitude when I sell something personally of mine (from a business standpoint, I understand perhaps the wrong attitude to have). We honestly believe what we paid for our home in 2005 was a GOOD deal with the additional 30 acres (although to us, still very expensive in 2005). We actually got a price reduction when we bought the house, and the previous owner was good to us in our opinion in allowing us to give us a one year option to buy the additional land, because we were actually carrying two mortgages when we purchased our new home in 2005 (new job, new wife, new home with two mortgages I honestly thought I was having a heart attack one moment, and the doctor laughed when I told him about everything that happened to me in a span of 3 years).

Although we can’t wait to downsize now at this moment in time, the reality is I love what this home has provided to us as over time, and it worked out exactly like we planned (raising two boys and still allowing my father to live with us and perhaps even my MIL down the road now that the house is empty). This may be odd for a realty strategy, but when we sell this home and land, we’re actually hoping to find a couple who looks at it exactly like we did as a means of raising a family "in the country" while being able to take care of any mothers and fathers of the buyers. I understand that a seller shouldn’t get emotionally attached to their home, but if we can cut someone a break like we think we did, that’s icing on the cake in providing a home for a family.

All that said, that line of thinking is out the window until we get the house professionally appraised, and it seems that will be held off until we’re actually ready to sell and move.

 

[Sigarms]

Popcorn Ceilings here are a big deal… some have them tested but they do eliminate potential buyers.

Honestly we hated them (popcorn ceilings) when we bought the house, but the reality is we fell more in love with the property and it what it provided vs the actual home.

The popcorn ceiling will most likely be the next project. With the height of some of the ceilings in the house, I'll be paying someone to do it. We did the bathrooms, and I have to say, the guy who built the house kind of did things overkill (the was paper was unbelievably hard to remove years ago).

 

[plowhog]

I understand that a seller shouldn’t get emotionally attached to their home, but if we can cut someone a break like we think we did, that’s icing on the cake in providing a home for a family.

Most sellers overvalue their personal residence due to emotional attachment and non-tangible factors. After all, it was what "they" chose to buy above all others, right? It is very difficult to be objective when you sell your own residence.

I do understand the pull and tug of the intangible factors. I have a rental property where I really like the tenants and they care for the property in an excellent manner. So their rent is far below market value due to that. Not the best business decision when it comes to dollars and cents, but one that "feels good" to me.

For fun, re-run your economic comparison about your personal residence. Then add in the cost of what you would have had to pay rent had you not purchased and owned your home. Now the numbers that show the benefit of home ownership really start to skyrocket.

 

[riptides]

....

For fun, re-run your economic comparison about your personal residence. Then add in the cost of what you would have had to pay rent had you not purchased and owned your home. Now the numbers that show the benefit of home ownership really start to skyrocket.

LOL. Unless your a dumbass like me and purchase a money pit that used to be a dairy farm and sink 20 years and a few hundred k into "renovation".

No worries here about capital gains or selling if that time comes. There are enough bad memories to out number the good. LOL.

 

[Torvy]

We just went through this last summer.

Eddie is right. I'm stubborn though.

I didn't want to spend the $10k+ to do all of the things the realtor wanted to ring in top $$. Mostly paint.

Buyers are definitely dumb and paint matters...but, they often turn around and repaint anyway. We offered a paint allowance.

Selling is always a PITA, but we are in our forever place. 1 floor. We do have a small attic, but all equipment is on ground floor (furnace, WH etc.)

Like Plowhog, we spent years finding the right place. Our shared vision was always to return to a rural location on retirement. We had already found a great state, just needed the right property. Planning is worth it.

 

[Sigarms]

Most sellers overvalue their personal residence due to emotional attachment and non-tangible factors. After all, it was what "they" chose to buy above all others, right? It is very difficult to be objective when you sell your own residence.

Although I love the home and what it provided for us a family, I consider myself a realist. If anything, I'm falling over dead looking at the comps in our area for what a house our size with land is going for. Like I said, when we bought the place I thought to myself if we could break even we'd be ok.

Did have a interesting conversation with an appraiser today (he's not with a real estate company). Apparently NC is very weird on values of basements below grade per state requirements. Talking to him, seems like its the same state that has rules and regulations per the HVAC industry that leaves you scratching your head LOL.

 

[plowhog]

Sounds like you are making good progress. Maybe you are already doing this but doing some shopping about what property you want to transition into would also be helpful.

 

[Torvy]

^ We focused on future land first. Borrowed for the land knowing the sale of the house would pay it and new house off.

As annoying as selling can be, finding the right place, or building, will take more time.