October 2012 Net Worth Update as well as a Home Sale and Purchase Update

Every month since the beginning of 2011 I have shared how my net worth has changed in terms of month over month, year to date and since Jan 2011. I share just the change not the whole numbers.  I am well aware of the negatives associated with this method, but it is the only way I can share comfortably what is going on with the balance sheet of my family without feeling uneasy.

Calculating my Net Worth

The assets I include are:

  • My Cash Savings Accounts – This has been our main focus for a VERY long time as we will be purchasing a new home in the very near future.  I can’t wait for the process to be done so The Wife and I can make up a number and once it is hit I can ignore the account.
  • My 401(k) – After months of talking about doing it I finally rebalanced and reallocated my 401(k).
  • Random Non-Qualified Investment Accounts
  • The Wife’s Roth IRA
  • My Dividend Investment Portfolio – Easily my favorite part of my financial empire hut.  This month I am going to update my watch list for the final time in 2012.
  • Home Value – I have kept it constant since the beginning of this experiment.
  • My Traditional IRA – Been trading using my covered call strategy.  I have had some activity in this account and owe the site an update post.

The liabilities I include are:

I only have 2 main liabilities, but they are very significant in terms of whole numbers.

  • Law School Loans
  • Mortgage – This is going to get a lot larger in the near future

No CC debt and my car has been paid off since July 2011.  The car, a Mitsubishi Galant, is just shy of 80K miles and is six years old. My Plan is to keep it going strong at least for another 20K miles (maybe year or two) and then see where I am at financially and with The Wife’s car (when her lease is up she wants a minivan, which saddens me lol).

My Net Worth Growth

  • From September 2012 to October 2012 my net worth increased 2.70%
  • Year to Date my net worth has increased 37.15%
  • From January 2011 to October 2012 my net worth has increased 136.96%

Home Sale Update

I announced in March of this year that our home was officially on the market. I then provided an update at the end of April and since the last update was in in August I figured it was about time to share what was happening.  Interestingly, every single buyer in those updates did not work out, and instead we have a new lead.  More than a lead actually he has already signed his copy of the contract!  So if everything works to plan I will be “in contract” sometime in the next few days (I am writing this post on Sunday night Monday at 12:30am for a  Monday Morning publish).  They have already inspected the home and no issues were found, and they are currently working on funding but it doesn’t seem that will be a problem either.

As far as sales price it is a bit lower than I expected to take if you had asked me in March but within a grand or two of the price I would have given you in August…but I guess that is pretty normal.

I think The Wife and I found a town we want to live in and even our desired neighborhood!  We put some offers in but nothing worked out:

  • House Number 1 – this thing was AMAZING.  The previous owners set it up nicer than what The Wife and I could ever come up with.  It was higher than what we wanted to spend but still wouldn’t be house poor.  The open house had a line to get in lol! We made an offer, their response was “good starting point” but never gave us a counter.  They called a few days later and said they had a ton of people interested and give best and final.  The Wife and I didn’t want to lose this house over a few grand so we literally offered them asking! Something I SWORE I would never do.  They said we weren’t even in the running! I can’t wait to see how much it sold for.
  • House Number 2 – At the same time we saw an un-updated version of almost the same house and we figured we could turn it into House #1 with $75K – $100K over the next few years.  Plus it was on the market for 4 months so that was good.  The same day we made the first offer on House 1 we offered 20% lower than asking on House 2.  To say the owners were less than satisfied would be an understatement.  The word insulting might have been thrown around lol.  So, after we lost house 1, we called them back up to ask “closing questions” (i.e. how old is the roof, boiler, etc). The broker said don’t bother they already got asking lol.  Not that I would get involved but I can’t for the life of me (other than a shady ass broker) understand why they wouldn’t have tried to get a bidding war going.  What occurred was that after we lost House #1 there were a few of us that were outbid and someone went to this house and just wanted the process to be done with.
  • House Number 3 – Same day we made the other 2 initial offers we made a 3rd offer on this house.  The broker and homeowner are absolutely insane.  In this market they actually raised the price $25K! Like no one has the internet and can’t figure out what they did lol.  We made an aggressive offer they didn’t counter so we are done with them until they get realistic or find a sucker lol

So we lost those houses! We saw 2 more houses in that same neighborhood but prices are crazy in terms of comps.

So today, we made a flyer that said we are a young family looking to move to the area and if they were on the fence about selling here are some recent comps (and they wouldn’t need to pay a broker 4%) and literally put it in the mailboxes of everyone in the neighborhood with that model house! I doubt anything will come of it but what the hell, right?

So at this point we are going to be closing probably early December and we don’t have a place to buy, but we do have my parents who live a few miles away.  I don’t want to end up there, but I am not going to be forced to buy a house we don’t absolutely love just because it may be a bit annoying to move back to mom and dad’s. Plus think about the money I could save just going there for a month or two LOL!

17 Responses to October 2012 Net Worth Update as well as a Home Sale and Purchase Update

  1. Wow, great anecdotes! Sounds like the bulk market is back in RE! Funny how things turn so quickly.

    I’m glad I didn’t sell my house several months back. I wouldn’t be able to get back in to the market!

    I think the market is really in a Multi hear upswing now.

    • You know if I were a betting man (and I am but not with that kind of cash) I think we are hitting the bottom at least in the neighborhoods I am looking. I feel like it is really difficult to say EVERY place in America is back.

    • Interestingly, I told a few people about the idea at work and they said they have done something similar in the past. Whether it works or not you’ll get an update!

  2. If it were all about money, I’d be living at my parent’s house right now!

    My dad actually did something similar to what you’re doing now. He knocked on the door of a house he loved and said, “If you’re ever thinking about selling your house, I’m your man.” The people laughed and said they were there forever. Two days later they called back, my dad made an offer, and that became the house I grew up in.

  3. Congrats on the house contract and net worth growth. I’d say go for a short term rental if you don’t find a place you want to buy. They are easier to come by in some parts of the country than others but it’d save you some sanity of moving in with the parents!

    • I actually don’t mind moving in with the parents if we don’t find a place…The Wife that is a different story.

      The short term rental thing sounds like a terrible terrible headache. I’d have to balance moving a ton of stuff without the added ease of at least saving some more cash.

  4. Wow that is tough having 3 houses slip through your hands(or maybe blow right by you with what it sounds like is happening). Good move not overspending though. Now that you know how much you are going to be getting for your house perhaps that may be a good number to use for your house value seeing that the best number to determine the value of your home is what someone is willing to pay for it.

    • ” Now that you know how much you are going to be getting for your house perhaps that may be a good number to use for your house value seeing that the best number to determine the value of your home is what someone is willing to pay for it”

      I think I am going to just let it go since it is within a few grand. I think the harder part will be seeing my net worth decrease when I close from transaction costs even though I am just trading an illiquid asset for a liquid one.

  5. Sounds like a lot of tough competition for where you want to live. Good luck finding a place. I hope you don’t have to move in with the parents. I know that I don’t want to do that ever again.

  6. I am not that against the idea…only because I am TERRIFIED of the double mortgage problem if our buyer doesn’t get to the table to close

  7. well done. Congrats for your progress. After reading your article, it seems that the housing market is back, I have read some news on housing market that are very encouraging.

    • I am not sure if the entire housing market is back but it does seem that in the areas we are looking in there seems to be some movement from the bottom.

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