So after the debacle with our renting situation last week, I thought it would be smart/fun/interesting to see what our house could sell for shall we put it on the market instead of renting it out. Ya know – in case I lose my mind and just say “F it” one of these days (only a 1% chance of happening btw, but you never know ;))
It’s been almost exactly a year since the last time we updated it (when our neighbors sold theirs for $285,000), so figured it’s about time to get it checked out again anyways. And anytime we do we usually just hit up our realtor who runs comps and gives us a good sense of what he thinks it would *actually* sell for vs what computers say. Another reason I don’t like to use Zillow or the likes which thinks our house increases $10k a day and then loses $30k another. It’s way too all over the place for me to take it seriously, so I just go straight to the source who would be selling it for us on the day we finally decide to do so. (I have heard others have better success with Zillow though, fwiw)
And to my surprise he said values in our area are on the rise! The first time since starting this blog really that I’ve heard such a thing ;) That’s over 5 years of dropping values!! So needless to say it pepped me up a bit more and got me excited again that we actually own. It’s just so crazy to me that the same exact property can gain and lose hundreds of thousands of dollars just because of “the market.” IT’S THE EXACT SAME HOUSE!! Haha… well actually that’s kinda a lie now though since we dumped $20k of renovations into it, but you get the point ;)
So our realtor ran the comps (comparisons) of recently sold houses in our neighborhood, and they ranged from $300,000 on up to $320,000 – all for similar beds/baths and square feet for the most part (the $320k one actually had 1 more bedroom than ours). Not as good as the heyday where they were all in the $360k+ range, but still very welcome news after all the nonsense that went down in this housing crisis. And all of which are better than the $285,000 we last pegged it at :)
I then asked him what he’d list it for on the market TODAY if we were so inclined to do so (btw he knows the ins and outs of not only our home since he sold it to us originally, but also the whole community where he’s lived and represented for over 30 years now), and he said he’d have no problems listing it for a cool $310,000. And said more than likely it would sell for around that or a little less after negotiations.
AWESOME!!!
Now again we’ve since dumped $20k into making ‘er prettier, but still. If the market continues to climb over the years and we continue to pay down the debt, we could soon be out of “underwater” territory and into the PROFIT region – *gasp*! I have yet to know what that feels like as the market crashed the day we bought the place ;) Haha… well not on THE day, but it sure as hell felt like it.
This ALSO means that the ol’ refinancing plan could again be a possibility one day too! Cuz if you recall the last time we tried (approx 4 months ago) the banks were going on the $285k number which meant we had to come up with literally $100,000 when all was said and done just to play ball. (We would have had to pay it down enough first to get it not underwater, and then even more as a 20% “down payment” on the place. Very un-fun to think about, though very fun to scheme :)). With all the moving and life changes going on we put the whole thing on pause and haven’t thought much of it since, but it would be interesting to see what the options would be now with the markets doing a bit better. I suspect the situation might be the same though, just with a lower number we’d need to bring to the table in the end ($70,000 to $85,000). Which would still be pretty un-doable…
Anywho, all exciting stuff to think about. None of it really matters TOO much until we actually go and either put it on the market or try and get it refinanced again, but it all helps me feel better about the situation nonetheless. Even as just a distraction from all my panicking for a hot minute or two ;)
I think I’ll just list the home’s value at a flat $300k too for net worth purposes and lean on the more conservative side. That way it gives us some wiggle room both on the negotiation side AND the market lumping side, and then hopefully we won’t have to think about it much anymore once we get a dang renter in place… That’s still the dream and plan for the near future: to rent it out for a year or two and then see how we like it and re-evaluate from there.
So we won’t be selling it anytime soon, but at least we have a better idea of the situation and can sleep a tad better at night ;) Hopefully you’re seeing similar increases in your neighborhoods too!
Here’s to stupid frustrating more satisfying home ownership!
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(Photo by juliejordanscott)
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Glad to hear things are looking better for you. I hope things stay firm and we do not have to experience what we went through 5 years ago. However, I have a feeling we may experience some of it again in the next 5-10 years as I am not sure these levels are sustainable. I hope I am wrong. Best wishes for you righting the ship!
Maybe by then we’ll have sold our homes for a tidy profit, and then once the bottom hit picked up a new one and hit another home run? ;)
Awesome news J. Money! So glad to hear that that sloppy situation might be starting to turn around for you guys. Congrats!
Thanks man! We’re not out of the woods yet by any means, but it does feel good seeing a little light shine through :)
Be careful throwing that profit word around! But hey, at least you’re closer to coming out of it with some cash! Do you plan to sell as soon as it comes out from under the water, or just continue to rent until you can get a good chunk of cash out?
I go back and forth with this each week. I’d love for it to be completely gone and off the books for good, but the other part of me really wants to give the income property thing a chance and see what that experience is like. So the plan right now is to give it at *least* 1 year where we’d hopefully have a renter in and experiencing all that, and then re-evaluate once the lease is up. By then we’ll know a lot more about our own finances and careers/living situation too (since our current move is also a 1 year test).
Good to hear that you house is appreciating in value! One of the big reasons I’m afraid of buying a house is because I don’t want to be underwater, and the markets seem to fluctuate so much these days. Good luck getting a renter!
You’re smarter than I was. I never realized it could go down in value! At least if you were to jump in now or in the future you have a good understanding of how it works :) And odds are you can’t screw up too bad since most of the homes are already knocked down in value a lot vs 6 years ago.
Dude, that’s awesome. More credence to long haul thinking and planning.
I can start getting used to this if it’s turning into a trend ;)
Might want to ask your guy for a BPO…Brokers Price Opinion…it sets it in “stone” more or less. Versus a Realtor saying …”I wouldn’t be afraid to put the house on the market for $310K”…only to have the property languish on the market and the agent asking for a major price reduction after 30 days to saaaay….$285K. Real Estate values are very subjective and is more of an art than a science…IMHO. Any luck on the rental market? The heat has put a bit of a damper on our market here.
Huh, never heard of that one before. If we were serious about selling it we’d put in a lot more time and research (and possibly doing that BPO thing too), but since I just wanted a good estimate of what we can realistically expect give or take, I’m fine w/ the $300k number for now. Especially since it’s at the lowest of all the comps in our neighborhood. And I reckon if we went the refinancing route later those appraisers would value it around the same ore more too – which is all I need to know at the present time.
As for renting it, we have about 4-5 people scheduled to come check it out over the weekend according to our property manager, so *hopefully* one of those bite AND it’s a good one. Feel free to keep us in your thoughts for it to work out:)
J–in my market area (Seattle) Real estate has been on fire. One neighborhood I actively work has had prices go up 15-20% since the beginning of this year. It really helps sellers that the REO inventory has burned off in our area (not sure about yours), which is driving prices up. I’m very excited for what the rest of this year holds for real estate. :)
It’s a great time for you to be a realtor!
Have you subscribed to eProperty Watch? That’s one of the main tools that we use to stay on top of sales comps in our area and allows us to run our own comps. Considering we know the houses in our neighborhood better than realtors or Zillow… We’re pretty confident when we run the numbers ourselves.
Never heard of! I like the sound of it though :)
Great news J$! Isn’t it cool to see the value actually going up for a change?! :) We’re finally starting to see the same thing in our area as well as houses selling quicker which is encouraging to see.
Yeah man, I just can’t fathom it all the way yet, haha… first time EVER since owning!! I remember everyone saying that real estate can only go up so it’s the best move you can ever make… WRONGGGGG, haha… but I am glad we’re living through it all and learning as we go. I’ll never make a similar mistake again, I can tell you that ;)
That’s awesome! Scary how property values fluctuate so much. It’s so important to avoid an affordable house!
Avoid one?? I’d think that’s what you’d want to get ;)
It’s great to see your home price increase in value. We updated our home value last month too and it gave our net worth a little boost. The housing price on the west coast has been on a tear lately. I wonder if we can keep it up.
I hope it can!
Don’t forget to subtract out $30K or whatever it would cost in your region to sell, including realtor comission and transfer tax. Sorry to be a buzzkill!
Haha yeah, very true :) For net worth reporting purposes though, I leave that stuff out. It’ll get updated appropriately when any assets sell.
Less than 10k until your house is back in the black! That’ll take you no time at all :)
I’m praying!! Although we REALLY need it up another $60k to truly break even – that’s what we paid for the place all those years ago, ugh…
That’s great news! We’ve been getting similar news about our house from our realtor (my mom). It sounds like properties in our neighborhood have increased nearly 20% in the past 2 years. I love the sound of that! Hopefully it all continues.
Awesome having a mom as a realtor! I bet you guys get crazy deals and jumps on things right when they get on the market :)
Great news to hear! Positive things happening after a slew of bad things:P Things always come out right in the end.
I’m sure appreciating things more now, that’s for sure.
Ours is up a good $50k as well over the last 6 months or so. I actually have a positive net worth now :)
As you said, it’s all hypothetical unless I put it on the market and sell for that price. That being said, it’s nice to see the net worth increase on my Mint.com net worth tracker. :)
Yup! And that motivation can do wonders for your goals too – even if they’re inflated a bit. So keep running with it!
Congrats on your recent good news! I hope the trend continues for you.
Thanks man – hope things are going well for you too :)
That’s great news!
I’ve also had a realtor run comps every couple years on my home–it’s time again.
I hope your home continues to appreciate.
Smart minds ;)
That’s great news! Now that the real estate market is officially recovering, your home value will only get better. As a real estate investor, I have to say there’s a lot more competition when you want to buy a property now. Multiple bids are not uncommon, even with dilapidated distressed houses.