Sell our House or Not? We are at an impasse, HELP!

April 12, 2012 11:17 AM

Sell our House or Not? We are at an impasse, HELP! Extended explanation inside.

We have a realtor and I know you are not our realtor but we need some objective, outside opinions.

My wife and I bought a charming 1600sf home in our town soon after marriage and we've been in it 7 years. It's a simple bungalow but has a large office space, the three bedrooms we need for our now 4 person family and a huge backyard with trees which is rare in this part of the city. We've updated the paint, trim, and maintained it quite well. It'll need a new roof in the next 2 years and last year we put a new a/c unit into it. We've paid down the house from 124 to 104 in the past 7 years.

I would like to move elsewhere as we are moving out of storage space and I'm afraid we're going to have to do more work on this house before long. Nothing has really shown up other than having to snake the pipes and we'd need insulation but I tend to be a worrier. Plus, having an actual laundry room and not having the washer/dryer in the garage would be fantastic. My wife likes our house and is attached to the area we live in. Unfortunately, to move up 400-800 sf in this area doubles the house prices. With the difference in interest rates, we'd only pay 200-400 more a month, which is stretchy/doable (until the kids are out of daycare in 2 years) but the sticky issue is this:

We found houses last year that we liked (we put our house on the market in the late fall and only managed to get 3 showings) but no one bought our home so we lost the one liked to another buyer. This year, we put it back out and within 3 days have a firm offer with no haggling. With realtor fees and what not we'd still walk away with 20-25K which we're very happy with. However, we haven't signed yet and we're going to lose the buyers if we don't soon. The reason is that my wife is frightened we won't find one she really likes in our price/area range before the close date AND she doesn't think we can manage an intermediate move to an apt both financially and easily considering our toddlers and home office. Also, she flat refuses to go along with the idea as she feels it's too chaotic. She wants to pull out and find one and then take offers/relist/etc.

This was a our first house, so we have no experience in this area. Our realtor says more homes will pop up in our area (Tulsa/Midtown) in the next month and the buyers would give us 8 weeks of closing time. We're not sure if that's true or hopeful thinking because she's obviously out for commission and we've looked at 50 houses and NONE work. Should we jump forward or pull back and sell first? If we wait till next year do we screw ourselves of the good interest rates and the soft market? If we waited the 2 years until our kids are out of daycare (freeing up 1500 a month) would we be in a better position or worse due to IR and market move? Our mortgage right now is roughly 920 a month if we went with a house that ran 225-250, we'd be dealing with 1390-1500. Again doable, just tight. We're just afraid the house we want isn't out there yet and we are still comfortable in this house, minus the storage issues. We're just lost and need any and all opinions.

posted by damiano99 to home & garden (19 answers total)

You can always offer to rent your house back from the new buyers after you close. People do this all of the time. If you want to give yourself more time, put it in your counteroffer that you would like to rent the house for a month or two after closing. That should give you more than enough time to find an acceptable house.

Also, if you're looking at a family-type home, many people won't put those on the market until the kids are closer to being out of school. You're going to see a lot of houses pop up every week from now through summer.

Congrats on getting such a good offer.
posted by Ostara at 11:21 AM on April 12, 2012

Take this with a grain of salt as I'm a "make do with what you've got" type of person. Your house sounds like a charming dream come true. If it's primarily a storage issue, why not rent a storage unit for what, $50 a month? If you need/want a laundry room - is there a chance you could add on?

If you really want to sell and buy and you're worried about closing and having to move and find a new place - you could always ask for 8 weeks (or more) to close, or get the house rented back to you for a few months, as Ostara said.
posted by Sassyfras at 11:32 AM on April 12, 2012 [2 favorites]

Your house sounds really great absent 2 problems--storage and laundry. The finish out for both is relatively inexpensive (especially the storage) so why not add on what you need?
posted by murrey at 11:37 AM on April 12, 2012 [3 favorites]

On the one hand: yes, you'll have to put more money into the house soon, and that's normal and okay; you shouldn't worry about maintenance. I went eight years in mine before things started blowing up, and frankly, I was lucky. So assuage your worrisome nature by socking away a little bit of money each month towards those inevitable repairs/maintenance items.

Similarly, the extra money you'd have to pay for a larger house can go to home remodeling work, such as putting the washer/dryer inside your house (I have a stacked unit in my old furnace closet -- I moved the furnace into the attic -- and my house is only 1340sqft.) You can also add wall storage with doors to hold that stuff coming out of storage, or take a deep breath and get away from those items. Plus, keeping your storage facility will be cheaper (most likely) than the cost involved with a new house.

Finally, your new house will need repairs and fixes, and if your current one didn't, you got really lucky -- so a new house isn't a way to escape that issue.

On the other hand: a firm offer without haggling is great to have. If you really want to leave the house and the area, or you really want to rent for a while and sit on that cash, or you found a home you love and can afford, I'd say take it -- but if those things aren't true, I'd say embrace the home you have in the area you love, and just maintain/repair/change it to be the house you want it to be. That's always cheaper for you (provided your desires are reasonable), much like it is always cheaper to fix your car than to buy a new one.
posted by davejay at 11:38 AM on April 12, 2012 [1 favorite]

note: my stacked washer/dryer are front-loading full-size units, not one of those smaller apartment combo units. I recommend sticking to full size with a family of your size.
posted by davejay at 11:40 AM on April 12, 2012

Can you add a small extension to your current house so that you can have that laundry room? Extend a little more and get the storage space? It's much cheaper to extend your current house than to sell and buy a new house. Also, if you have extra cash to put towards a mortgage, you'd be better off putting it towards your current mortgage. Paying the mortgage off early will have you a ton of money in interest. Plug the numbers into a mortgage repayment calculator and I think you'll be surprised. I agree with your wife - I think you should stay!
posted by hazyjane at 11:43 AM on April 12, 2012

If it's primarily a storage issue: get rid of some stuff. If it's primarily a "space" issue - toddlers take up a lot of space, I know - then maybe sell. Or add on.

Maintenance is a pain, but unless you're going to move every five years (yuck) eventually you're going to have to do that. So unless you're moving to a maintenance free house in your price range, you're going to be having to do repair work on a house where your budget is already stretched, unless I"m missing something.

But if your wife is putting up road blocks, I think you need to address with her why she doesn't want to move. Does she work? Does she maybe not want to work? Is she secretly scared that being tight on money is going to be very difficult, but she isn't really expressing that clearly to you? Because I can see myself doing that in the same situation. Being house poor is no fun, even if it is for two years.

I mean, generally I would say put the purchase agreement on the house, take the 8 weeks to look; pull out of the agreement if necessary. But it sounds like maybe she just doesn't want to move.
posted by dpx.mfx at 11:44 AM on April 12, 2012

Would you pay six or seven percent of the value of your current house, plus a couple thousand in seller's closing costs, plus a few thousand more in closing costs on a different house, plus the cost of moving all your stuff, plus $200-$400 a month higher payments, plus higher property taxes and insurance, just to have some extra storage and a laundry that's not in the garage? Because that's what you're really proposing here. Every house needs maintenance; you deal with it by budgeting for it, not by moving.
posted by jon1270 at 12:10 PM on April 12, 2012 [9 favorites]

Well, if you push your wife into accepting this offer then you are potentially responsible for everything down the line house-related that happens that she doesn't like. If she won't even negotiate on this, then I don't think you're accepting this offer.

Absent a compelling reason, I'd say not to get into a tight monthly payment scenario. If IR is an issue, then can you refi your current house? If you move now, what kind of cushion do you have (I mean chunk in the bank as well as monthly cash flow) for the unexpected? What happens if the new house needs a new roof?

If your finances are such that you can't financially manage an intermediate move to an apartment, then my thoughts would run towards saving some money and reevaluating when the kids are out of daycare.

It sounds like you're trying to talk yourselves into moving up to a bigger house. If you've looked at 50 houses in your price range and in the same general area and not one of them was good enough, then there's a decent chance you're letting the great be the enemy of the good and your wife is right, you guys are unlikely to find what you want in the next 4-8 weeks.

When you factor in the finances, remember the transaction costs - is what you're gaining worth that plus stretching your monthly budget?

All of that said, if the offer is right and you're sure you want to move, then accept the offer and do what you need to do from there - make it work. Ask your wife what help and support she would need to have in order to do the interim move if need be. More houses on the market soon means your house will have more competition - you may find what you want and then get back to the point where you can't sell yours soon enough at a high enough price, and round we go.
posted by mrs. taters at 12:14 PM on April 12, 2012

Don't discount the importance of being in an area you like. Do you have good relationships with your neighbors? Are you in good school zones for the kids? Those things do more for your quality of life than convenient laundry, IMO.

You're thinking about new roof, but think about how much that will realistically cost and compare it to just the closing costs on selling - I'd guess it will be pretty close. If you're worried about other repairs down the line, you can be socking away the extra $$ that would have gone to higher mortgage payments on new house.
posted by LobsterMitten at 12:29 PM on April 12, 2012

I'm currently visiting one of my kids with 2000 sq. ft of space in a great old house, but with few closets or storage. The lack of storage space was giving her that we-need-an-even-bigger house itch. Here's how she scratched that itch between our last visit and this one:

--She read a ton of decluttering/organizing articles and got rid of a lot of stuff. You have very small children now with a lot of equipment they won't need in just a couple years--strollers, playpen, and all that toddler/preschool stuff. Yes, they'll have bikes, sports equipment later, but there's a lot you can do with a garage to fit all that out there.

--She rented a small storage unit for business-related paperwork and inventory, plus Christmas and holiday decorations.

--She found some armoires on Craigslist and creatively redecorated them, turning one into a downstairs coat closet/spillover storage from the kitchen--trays, oversized pots, etc.

--She had a closet organizer redesign two big closets she did have, which doubled the space. I suggest the same for you as well as reading up on how to use your garage effectively.

You could redesign your office and those three bedrooms very easily. Apartment Therapy is a fantastic resource for that. You could organize your garage to use as extra storage. Is it possible to renovate a bathroom and add a stackable washer dryer to it, or even a side by side setup? It might be worthwhile to hire an interior designer for a fee to help you accomplish all this.

My husband and I lived in our 1100 sq. ft. "starter house" for thirty years because it was a great place to raise kids, convenient to our commuter station, walkable to town, etc. We loved it. Yeah, it was tight at times, but our taxes were lower because of the size, we didn't acquire truckloads of stuff, and we made the space work. (For $10,000, we built an excellent office/family room in the basement when the kids got older.) Some of our friends who "moved up" are rattling around in huge houses now that they are empty nesters. We always seemed to have more money for vacations and in our IRAs than people who were living bigger. We were mainly freelancers who never had a huge income, but it didn't matter because our monthly house "nut" was very reasonable. We knew bankers and lawyers who got in trouble with their too-big house with their too-big mortgages when the economy tanked. A smallish-sized house in a great neighborhood is a wonderful thing to own.
posted by Elsie at 12:29 PM on April 12, 2012 [9 favorites]

It's still a buyer's market and it's rare to get an offer so quickly, so congrats! And if you have a firm offer, you should probably take it, as who knows when you'll get another.

You have a few options here.

The best one seems to be to offer to rent your house (at close to market rate) from the new owner for a month or two after selling.

Another option might include asking the buyer to push back the closing for a month. Many mortgage companies offer 60 day rate locks. When we bought our house last year, we put a closing date one month after the offer. The sellers said that wasn't enough time for them to find a new house (even though our house had been on the market for 2 1/2 years (!) at the time we made the offer!) and asked that we push the closing date back another month. We were in an apartment that had a breaklease fee that was some percentage of the remaining months of rent or a flat fee, whichever was higher. The extra month pushed us into flat fee territorry, so it was financially advantageous for us to wait on the closing. The mortgage company allowed the longer rate lock and so there was no hit there -- somewhat unfortunately, mortgage rates went down slightly during the intervening time and we were already locked into a slightly higher rate but with rates going the way they are we may consider refinancing soon. It all depends on what situation your buyer is in. Pushing back the closing may be advantageous for you.

A third option might be to find a Residence Inn or similar long-term hotel and a storage unit or PODS for the rest of your stuff for a few months. Yeah, that's going to suck, but it will cover you as far as a place to live while you look for your new home.

By all means, talk to your Realtor! He or she might have other options like a short-term open-ended rental you could live in while you look for your new home, and might suggest some other arrangement I haven't even thought of.
posted by tckma at 1:09 PM on April 12, 2012

As others mentioned, you should consider an addition. You will be spending money on the new house anyway (besides the increase in price there are renovations that will most likely need to be done, higher taxes, unexpected expenses, closing costs, etc...). You have a large yard, so you can spare the space, and money-wise it may not be as bad as you think. You can also finance it. Shop around for contractors, come up with a plan that maximizes the space and utility and go for it. The addition will most likely pay for itself if/when you decide to sell anyway.
posted by pyro979 at 4:09 PM on April 12, 2012

I'll chime in with some contrarian advice, given the number of responses above that state 'live with less space'. With little ones underfoot, we didn't realize how 'getting by' with not enough room for storage took a huge toll on our psyche. To me it was worth every penny and bit of effort and frustration to get a larger place, and I didn't fully realize it until we moved in. Now we enjoy the space >every day<>
Congratulations on finding a buyer so quickly. I'm not sure about OK, but in both CA and in MD houses fall out of escrow / contract with the most flimsy of excuses, and if a sale was not meant to go through it won't. (In CA there was a period of time - IIRC it was 17 days or so - where a buyer could back out without any reason stated at all.) In the majority of the cases it is the buyer getting cold feet, so it is incumbent on you both being sure you want to do this.

But it is clear already from what you've done so far - putting your house on the market twice now - that you are very interested in moving to get more living space, and that is worthwhile.

(Assumption: that you've obtained solid estimates from reliable contractors on the time and money it would take to get the additional 400-800sf of living space that you need, which would double the value of the house, and that you've deemed that a non-starter for either the economic reason - that it would be foolish to put so much money into a house that you'll not see that money again - or the hassle factor - that you could not physically survive such disruption.)

Now is only April and there is a lot of inventory that will come on the market through the early summer. Looking at 50 houses is not unusual, you have every right to be picky and diligently looking at every listing as soon as it comes out, and as others have correctly said doing a rent-back is a completely viable option. Many have been in this situation before (selling a house before buying one); we were in the opposite situation (finding a house before selling the existing one), and what we did was to lower the asking price to flush out a buyer. It worked, and it worked well for everyone involved.
posted by scooterdog at 7:06 PM on April 12, 2012

Buying a new place may very well be the best option for you, but I would not sell your place until you find a house you love. Imagine how you will feel if you sell your house now, and in the next few months are not able to find a house that you love, so you end up settling for something. You will then be angry about the fact that you spent many thousands of dollars and uprooted yourselves only to be living in another house that isn't perfect.

You may be able to find the perfect house next week, or it may take 6 months. For the amount of money you are looking at, I'd say it's better to risk having to sell your house for 5-10 grand less than you are asking now and find the perfect new house, than to sell now and risk not finding a place that you love.
posted by markblasco at 9:39 PM on April 12, 2012

Your wife seems grounded in reality. Her reasons are pretty solid. Yours sound a bit aspirational, vague and based on what "might" be possible and "might" be nice to have. Your house sounds great.

Solve the problems you actually have - storage and laundry. The solution to a bit more storage and more convenient laundry is not a new house.
posted by barnone at 10:09 PM on April 12, 2012

If you listen to your wife, also pretend your mortgage IS that higher number and sock that extra amount into savings.
posted by salvia at 10:14 PM on April 12, 2012

Also, I'd recommend sticking with the maintenance issues you know versus the ones you don't.
posted by salvia at 10:15 PM on April 12, 2012

Thank you so much for the advice. Everyone has given us so much to think about. Just in case anyone wants to chime in on anything else (please do!) here are a few tidbits to add in.

1) We really cannot easily add on to the house, unless we go up, which is more than we are willing to spend for this neighborhood. Adding out on the first floor becomes difficult due to the grade of the ground and the tree/root cover we have. Adding up would make our house literally the most expensive house in the whole neighborhood by a factor of x2. We'd rather not be the neighborhood queen.

2) Our main concern in not selling now and trying to sell again next year (or even late this year) is where will the interest rates be? Right now we have buying power, but later on we might not. Does anyone here have any experience in this or thoughts on where things are headed? We bought our house at 5.6 and now we can get 3.7 easily which buys a lot more house. However, if we wait, are we going to lose our advantage?
posted by damiano99 at 1:20 PM on April 16, 2012