Before you decide to sell, make sure it’s right for you!
A couple of stories from recent listing meetings with clients.
Jack and Diane
Jack and Diane bought their 3 bedroom 1.5 bath house in 2009. In the next six years, they saw their family grow by 100% after two kids were born. The small house has become a bit cramped, especially because Jack is self-employed and primarily works from home. It’s a great set up for the kids, but can get a bit crowded, especially when clients come to the house. Diane finds herself taking the kids out of the house SOMEWHERE at times when it’s not entirely convenient. She’s spent a few afternoons in the car reading a book while the kids napped. Not awful, but not ideal.
So Jack and Diane called with the intent to sell their small house and find a new bigger house. We detected pretty quickly they felt that this was their only option and it made them sad to think about leaving their friends in the neighborhood. They did not specifically ask for multiple options, but because we think choices are in everyone’s best interest, we created two plans.
First, we did an in depth analysis of their budget and looked at how much of a mortgage payment increase they could comfortably handle, without completely changing their lifestyle and sacrificing the annual family vacation, as well as the annual Jack and Diane only travel that is important to them. In our discussions, they talked about giving up their “couple time” vacations, but it was clear that wasn’t really their preference, so we took that off the table as a starting point. We decided if we really needed to take that out of the budget, we would revisit the decision. Bottom line = they can comfortably increase their mortgage payment by $1,000/month that they’d been putting into cash savings and spending on numerous dinners out each month that they feel could be avoided with a more workable set up for Jack and a bigger kitchen (not redirecting retirement funds and not redirecting college savings).
Next, we performed an in depth analysis on their property and neighborhood and determined they could walk away from a sale with about $75,000. They could then leverage that cash into purchasing a larger home, we found a few suitable options that would increase their mortgage payment by about $800/month, which was below their $1,000 payment increase budget.
Sounds like a big win for everyone? This is where most realtors would stop and start counting up the commission. Woohoo – time for an agent vacation!
WE ARE DIFFERENT
We asked Jack and Diane to dig deeper into their options. They have a decent amount of equity in their property, what about leveraging that into an addition to create the space they desire? The idea had occurred to them, but they didn’t think they could afford it and didn’t know how to make it happen.
We had one of our contractors look at the house. He took their desires and created an estimate that would give Jack a separate entrance, a sound proof office/studio, expand the kitchen, create a master suite AND give the kids a separate playroom. The estimate came in at $82,000.
Then we introduced Jack and Diane to a banker friend who specializes in construction loans. Because rates are SO low right now, they were able to qualify for a construction loan to cover the cost of remodeling that increased their mortgage payment by only $882/month.
On the one hand, Jack and Diane were extremely grateful for all this information, but on the other they joked about doing such a great job that we presented them with an extremely hard choice.
Next we looked at several homes that met most of their criteria. Nothing was perfect and it became obvious that the wonderful friends they’d made on their block was holding them back.
In the end, the renovation turned out to be the right choice. They’ll be done before school starts in the Fall. Although a renovation is tough to live through, the temporary pain turned out to be worth the long term joy gained. Jack and Diane are very happy and excited about their decision.
We made exactly ZERO commission and fees, but we’ve gained a forever happy client, which is more important than any amount of temporary increase in income.
At the other end of life’s spectrum…
Ms. Maggie was having trouble making ends meet and felt that selling her home was her only choice. She called us to give her a market evaluation. Most realtors would simply list the property and get a sign in the yard ASAP.
WE ARE DIFFERENT
As we got to know one another, Maggie started sharing some of her financial concerns with us. We asked “instead of just looking at selling, let’s drill down into your budget and see exactly where you’re having issues.” It took a little while for Maggie to get comfortable with this idea. She’d been managing her household’s finances for her entire married life. She didn’t want to ask for help, but when she decided she’d rather ask for help then just sell her home, we got down to business.
We spent about 16 hours going through every expense Maggie was managing. We discovered several opportunities to save a lot of money:
- Credit Cards – Maggie had 4 different credit cards, she pays them off each month, but rarely uses them. Turns out Maggie had been signed up for several recurring fees that were unnecessary. She had two identity theft services, three recurring service fees for things we couldn’t figure out, a phone protection plan, an on call technical service for her computer, a fraud alert service and a monthly maintenance charge from the credit card company. We cancelled one credit card and removed the services from the other 3. We recommended she pay off a card that started as 0% balance transfer, but was now accumulating hefty interest charges. This took several hours on the phone with the credit card companies and the companies that were charging the monthly fees, which we did alongside Maggie to make sure all the changes happened. Everything from this effort came to $300/month in savings.
- We went over her property tax record and realized she was not receiving a deduction available from the county. We got the paperwork, filled it out and submitted it. Another $200/month.
- We went through her phone bill and cable bill. Consolidated into a bundled program. Another $80/month.
- We referred her to a social security expert, found that she had not been receiving her full benefit. They were able to get her $9,000 in past due payments and increased her monthly benefit by $212/month
In all, Maggie now has an additional $792/month and $9,000 in cash.
Selling no longer seemed like a necessity. Now Maggie has choices. We knew her preference was to stay in the house as long as she could. A preference that we support.
Instead of selling, we introduced Maggie to our bath and tile expert, she had the bathtub replaced with a shower stall so she could roll a wheelchair into it if needed. She had handrails installed near her bed and in the hallway. She also bought a beautiful new chair with a push up mechanism and a swivel magnifying glass/lamp to continue to do the crosswords and read her beloved books.
Again, we made exactly ZERO dollars in commission and fees, but we helped change someone’s life and once again have a forever happy client.
Do you want to understand your choices? Give us a call, we’ll look at your options from different angles and work with you to find what works best for YOU!