It was about a week ago that we put our house on the market. I never really understood people’s fascinations with their home insofar as I just looked at is as an asset (or liability) if it costs too much to hold on to you just sell it. If the home no longer meets your needs you sell it. That has all changed for me recently.
When The Wife and I decided on a hard date to put our home up (March 1st, 2012) I immediately thought of all that has happened since I closed on house on that faithful day June 13th, 2007. I even get a little choked up about it which is big for this emotional wasteland of a guy.
The Wife and I have some AMAZING memories here, we changed from partying 26/27 year olds who are single and might enjoy a 3am party into responsible married parents. We have made some lifelong friends while in this house and lost touch with others. We have some miracles, some tragedies and some near misses. I know it isn’t the home, it is us, that has these memories but for some reason I am having a hard time separating the two right now.
The Finances Behind Our Home
Lets put down our tissues and talk about dollars and cents. We bought the home as part of a special program whose goal is to keep young professionals on Long Island. The purchase price was $250,000 and for anyone that knows the north Nassau County housing market it is clear that this home was way undervalued. Actually it was so undervalued that homes that were not part of the program were selling (right before the bubble burst) for over $500,000 in our neighborhood. Granted those homes were much nicer inside, but same basic living space. I know some people are thinking $250K for a townhouse? You must be kidding. It is what it is on Long Island…hell, New York City is even worse! You can’t get a one bedroom walk up for less than $450K.
At the time, I got a fantastic rate of 5.875% which seems high today and we put down $17,500. Interestingly, it had to be a 40 year note as my debt to income ratio was out of whack since I wasn’t married so couldn’t count The Wife’s income towards the mortgage plus I had an auto note and student loans. Almost all of that down payment was made possible by The Wife’s grandparents who gave gifts over The Wife’s lifetime. They are/were the epitome of all that was right financially with their generation and deserve a post next week.
The house, while an awesome buy came with some restrictions:
- We had to make under a certain amount, which I did because I wasn’t married at the time.
- The sale price was tied to the median income of my town at the time of resale. I remember at the time thinking how much it sucked that the home wasn’t a free market home…and then the housing bubble burst and it looked like I just made the greatest economic decision for myself next to going to law school.
Over the next 5 years the home maximum sale price increased from $250,000 to a bit over $300,000 for a 4% gain per year during the worst housing market correction ever. I’ll take it!
So upon closing, we will get our down payment back, our gain plus whatever we paid off on the mortgage which is a depressingly low amount! Minus legal fees and possibly realtor fees.
Possibly Realtor Fees?
Another restriction with the program is that we have to give the non-profit administering the program 60 days to get me into contract.
The pro is that I get to help out another young person stay on Long Island and they get all the benefits that I got. This is REALLY important to me. Another pro is that I wouldn’t have any realtor fees and at 2 to 4% we are talking about saving $6,000 to $12,000! That is a lot of money.
The con: They are a non-profit that is not properly set up to sell homes. They just aren’t a realtors office nor do they have any interest in being one. So we’ll see if they can sell the home in the allotted time.
Where are We Going?
Where will we end up? Who knows! Right now I am just hoping my marriage survives the stresses that are inevitable in selling a home, closing on said home, maybe moving in with my parents, moving The Wife into my parents, finding a home and closing on said home.