September 25, 2017

Selling our home in California: Part 3

We left off at having a ratified contract because that’s all the fun I could handle and holding my breath for 30 days was enough distraction.

But I can never resist a “what will you do with that money” question.

I have a spreadsheet gaming out every sale price scenario and therefore decided where any money will go long before we even listed the place. I’ll fiddle with some of the details still but the broad strokes are right.

Note that in the interest of not tempting fate, I started my possible sale price scenarios at the lowest possible price, well below the current comps, and ran it in $25,000 increments until I went over the current comps.

In order of priority, this is how I’m planning to distribute that money:

SALE: 
5%, broker and sales fees
28%, pay off the remaining balance of our loan
18%, repay personal loans
18%, repay our savings account
25%, pay down our new loan
4%, invest
1%, long term disability insurance
1%, charity

Repaying loans: The very first thing I’m going to do is pay off all the personal loans. I practically have my pen in my hand to write the check right now, I’m itching to get that crossed off the list.

Taxes: I’m not leaving anything for taxes, you’ll note, because we qualify for the federal capital gains exclusion and our end gain (Amount realized from the sale – the cost basis) won’t be over the $500k limit, more’s the pity, and it should be reasonable to expect that we shouldn’t have CA state taxes, too.

Charity: Our planned giving should be higher but until I’ve safely refilled all our coffers and figured out our new cash flow, that will need to wait. Remember to make sure your own oxygen mask is secured before helping anyone else!

The new mortgage: I have always planned to pay down the new loan, and recast it for lower monthly payments, but a new player stepped onto the stage a couple weeks ago. They offered a refinance with no closing costs and a drop of our current interest rate by .25%. It’s just a matter of when I feel like I can take that extra task on – let’s say two months after we’re moved in, I’ll dig into that.

Either way, my first step is dump cash into the loan once we receive the funding. Option 1 after that is refinancing with the other lender which has been kind of ehhh in the past but a lower rate without fees is attractive. Option 2 is to convince Chase to match the lower rate with no closing fees offer.

Whichever route works out, as long as the rate goes down and I drop that cash in the loan, we could reduce our monthly nut by about $1000. Then we’d only have doubled our housing costs, not tripled them. I AM going to miss some of the amenities we’ll be walking away from.

I’m tempted to peel off a little of that cash to treat ourselves to little things but it’s really not necessary. The real reward will be living at the address of Not Utter Chaos!

Plus, and this wasn’t planned, I have a special little box of a couple adorable things I splurged on at SDCC which includes a surprise for JuggerBaby from zir uncle. Unpacking will be a little less awful when we run into those treats.

Read Part 1 and Part 2

:: Do you treat yourself after finishing massive projects or do you just take satisfaction in a job well done? 

September 18, 2017

Living spaces: how much and what do you need?

[Part 9] Once upon a time, and as recently as this spring, I wanted a house with at least five rooms: three bedrooms, an office, and a library. Maybe four bedrooms. Wide spaces, with room to stretch your arms out wide and wiggle your fingers. Then to race the dog down the hallway and see who successfully skids to a stop before slamming into a wall. Dreams of a country girl.

Thus I confess, occasionally I get bitten by the jealousy bug when friends buy a 5-7 bedroom colossus on a 10,000 square foot lot for much less than our down payment.

But the reality of our lifestyle (low-key, low-energy, focused on financial freedom) doesn’t line up with the commitment of such mansion style living. And just as important, the reality of where we’ve chosen to make our lives means that we’d pay dearly and be mortgaged forever and a day if we were so very expansive when we finally found our next home.

On the lower end, the average price per square foot ranges from $500-700 hereabouts. On the higher end, I’ve seen $900-1000 per square foot.

At these prices, we would be giving up our dream of being financially free for a house.

Now, if ever there was a hermit who could flog down that cost per hour-lived-in, I’m your daisy. It took me two and a half years of working solo before I even considered it might be a good idea to see people occasionally. Maybe. (No.)

Thankfully, sense and a bit of luck prevailed – we didn’t paying our maximum bid on the purchase, but we surely paid enough that I’m simmering some ideas on bringing down the principal, stat!

Even at that cost, we didn’t get the sprawling ranch home with a moat, and carriage house (and murder holes) I fancied.

We’ve maybe 1400 square feet. It makes up 3 bedrooms, 2 bathrooms, and a wee sma office. I have and would give up a lot for the balance of comfort and safety (physical or financial) of my family but if either of us ever have any choice in the matter, two bathrooms is a must. No coveted laundry room, unfortunately, nor my wished-for piano or library.

In short, it is enough room to live in, grow a little, host a friend or three temporarily, and grow old together without fighting over whose turn it is to clean the sixth bathroom.

We have a lovely bit of yard where I can have micro container garden adventures, and Seamus can sun his bones. We splurged on the Fancy Stove for my cookery and a bench for my bath because it’s every day now that I’m too tired to shower. PiC got to pick all the design and color elements so that this is a home he’d be proud of, though it was never designed with showings in mind. That’s why, though I’m proud of the work we did, I won’t be sharing pictures. We were making our home, not a showcase.

I have mild pangs of regret thinking we should have held out for something a touch bigger, a few more amenities, a few less compromises. But PiC is confident this is what we need and I trust his judgment too. Besides, what a wreck I’d be if I had to build my dream library during this very small window of time we had to work on the house!

Anyway this is all luxury, in the end. I grew up poor in Southern California so space to myself still feels like an amazing thing. A whole house for just my family is like the icing on the icing on the cake.

• Age 1, our family of four shared a 2 bedroom house with four other families.
• Age 3-12, our family of four shared a 600 square foot, 2 bedroom, 1 bathroom apartment on and off with single family members. We had one room, they had the other.
• Age 13-17, our family of four lived in a 1300 square foot house with three dogs.
• Age 17-now, our family of four, then three, then two, were in a 1500 square foot house with three, then two, then one dog(s).

Now we’re a family of three humans and large dog going from 1000 square feet to 1400 square feet, with enough room to comfortably lodge our rather frequent visitors.

PiC’s probably right, this is the right place for us. We were told to only list three Must Haves and we ended up getting 15 of our 20.

We can make this work!

:: What’s your living space minimum/ maximum? What are your dealbreaker amenities? 

Before: Background, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8

Next on our Home Buying Adventure: Part 10, Part 11

September 11, 2017

Selling our home in California: Part 2

Preparing the place

It takes me an hour, after several weeks of packing and shoving things into temporary storage, to hide away all proof we actually live here.

I could maintain a show ready house at all times if I got rid of a full storage unit of furniture, books, toys, comic books, records and junk, and I spent 2 hours tidying and cleaning every day.

No, thank you.

I fully intend to get rid of a good portion of that stuff once we’re moved. But as much as it’s nice that the floors are gleaming and all surfaces are clear, the result doesn’t bring me nearly as much joy as spending the time on something else instead. Like cooking for my family!

I managed to do take out on paper plates (the imagined “easy” way to do it) exactly once during the show season. The very next day I couldn’t bear it and whipped up a nutritionally balanced and even good-lookin meal. That’s where the satisfaction’s at!

Decisions with the California timeline

Our market in the Bay Area has cooled from a white hot frenzy to just a frenzy. The spring and summer were literally unbelievable. Homes were selling a couple days after being listed, even before the scheduled open houses!

Our sale period going into the fall, delayed from the original plan to list in the summer because there was a good solid chance I’d be checking myself into an institution otherwise, meant that we expected a slightly more sedate pace.

Even the slightly more sedate pace meant a great deal of planning for a ton of activity in a short ten day window, though.

First, identify all repairs needed. You wouldn’t think it was necessary given how much some of the literal teardowns were going for but again, we missed that period.

Second, gather all ye olde paperwork. We had seller disclosures to fill out, HOA documentation to hunt down, and a stack of papers to sign.

Third, this is where the timing gets tense – in the same week, and in this order: get the repairs done, the photographer in to take photos for the listing, decide on a listing price and dates and times of your open houses, write the MLS listing and post it, get the inspection done (why? See here), have the place deep cleaned and from there on keep your home spic and span because interested buyers may schedule a visit any time after you’ve listed.

*deep breath*

We listed on Monday, had a broker tour and inspection on Tuesday, and open house on Wednesday, Saturday and Sunday.

Offers were due by Wednesday, 9 calendar days after listing.

You wouldn’t think that we would have time to take a breath, much less be worried, with such a compressed timeline. But I’m a pro at multi-tasking so not only was I keeping our home show-ready, my family fed, my work done, I was also being a Nervous Nelly and officially a wreck by Wednesday morning. I was convinced that my timing, and the horrible political situation, combined to mean that we didn’t have any motivated buyers and our pricing strategy was going to come back and bite us.

Thank everything (and everyone rooting for us) that I was wrong on that score.

The negotiation

We had some very solid offers. In keeping with the cooler market, though, no all cash offers for us.

We had a handful of offers, two stood out as good offers. They were good for different reasons and also not good for different reasons. Our strategy, after discussing all factors: price, contingencies, strength of the likely loan applicant, the lender’s experience with this area (because we’ve had some regional difficulties that have tanked loans in the past), was to ask the second highest offer (B) to beat the highest priced (A) offer.

I know that seems counter-intuitive but this is why it made sense: A’s lending situation seemed iffy. Asking someone to adjust their lending situation isn’t an easy ask, though, and the agent was also insisting that we do some unnecessary work, citing (wrongly) mandatory regulations which we already met. B’s offer was weaker because it had more contingencies and a lower price, but those are things the buyer can personally  choose to change if they really wanted to. Offer B also wasn’t wrongly insisting that we fix things that aren’t actually problematic, and their preapproval was with a reliable lender we’ve already worked with in the past.

Our other approach was to have our agent initiate a conversation instead of just writing a counter and sending it without comment. This allowed us to informally negotiate and come to an amicable agreement quickly and easily.

B’s agent and our agent hashed out the details and our agent came back to us with a much cleaner proposal. The follow-up matched the money A was offering, didn’t come with extra work, and conceded the appraisal contingencies. Given the pre-approval with a reliable lender, keeping only the loan contingency worked for us so we wrote up the official counteroffer and by the next morning, we had a ratified contract.

You wouldn’t think a “small” thing like asking for one repair would be a dealbreaker but in this market, it can be. With all the plates that we’re spinning, I don’t want to take on even half another thing to worry about, and their request wasn’t a small thing.

Now, what’s next? 30 days until closing.

We have to be appraised, their loan has to be approved, we have to finish work on our new place, and we have to move by the date that we close escrow.

There’s going to be a lot of breath-holding while all this is happening, you already know that. Even though this seems like a good buyer and loan situation, anything can happen and that little catastrophizing prepper voice of mine won’t stop reminding me of that until the money is in our hands. Thankfully it’ll be evened out with keeping busy and reminding myself that it’s just a tense time but worrying over it won’t help anything.

I haven’t even touched on how much I hate change, so this entire process has had all my switches flipped to “NOOOO” for weeks. That’s probably why the catastrophizing voice gets so loud these days.

Read Part 1 and Part 3!

:: Have you ever had to sell a home before? What’s your least favorite thing about moving? Most  favorite?

August 28, 2017

On the home(buying) front: getting the work done

Interrupting this regularly scheduled post to say a few words about Hurricane Harvey. This weekend has been physically critically bad for me and it’s even worse for the people in Houston who were hit by the storm. If you want to help, please consider giving to some of the organizations below that I’ve found while reading the updates on the storm and rescue efforts. I know the Red Cross is an easy choice and if that’s what you can do, great. But local and smaller orgs also do important work and don’t have the same funding opportunities so I’m highlighting those.

Texas Diaper Fund. I’m hearing that disaster relief agencies don’t provide diapers. Babies always need diapers and can you imagine the added stress of losing your home and needing to find basics like diapers and formula? Using cut up materials like shower curtains after Hugo gave the poor babies horrible skin infections – let’s make sure they get the supplies they need.

Portlight focuses on disaster relief for disabled people. It’s hard enough being rescued or helped when you’re able bodied. Even worse when you’ve lost your mobility aids or badly needed medication or other critical to survival aids. I know that one day without my pain meds would be excruciating and I’m not even among the worst off.

Team Rubicon is a team of veterans who help on the ground and have a special fund for those affected by Harvey.

Humanity First is a disaster relief NGO that’s partnering with Muslim Youth USA to help in Houston.

And of course animals are always displaced by these natural disasters so thank goodness we have people helping here as well:

SPCA of Texas, Houston Humane Society, Austin Pets Alive!, San Antonio Humane Society

Notes – the best thing to do if you’re not local is give money so that the people on site can easily get the supplies they know are needed. Donations of actual things being shipped in creates more work for the volunteers who have to figure out what to do with them.

***** Back to our regularly scheduled post *****

[Part 8] I can’t even tell you how tired I am.

I could try, but words haven’t been invented for the exhaustion created by taking on a massive home renovation, selling the home you’re living in, working full time, while raising a toddler and tending to our senior dog, as a chronic pain and fatigue person.

If such a word exists, it’s probably in Japanese or German. With JB’s language skills burgeoning, who knows, maybe we’ll discover that word soon!

I’ve spent several days literally shaking, like my glucose levels just can’t perk up, gritting my teeth to get through the day, and hoping that it’s just stress and fatigue that’s affecting me. They definitely are affecting me, I’m just hoping that’s the only cause of this marrow-deep, three tons of pressure crushing my bones feeling.

The work itself

Our biggest drain is all the decisions we have had to make every single day. For example:

• where to place every electrical receptable,
• where to place every single light fixture,
• picking every light fixture,
• figuring out what our style is we stand amidst the dust and the bare walls,
• buying all the cabinetry, hoping the colors match what we’ll have to pick later for our walls, tiles, wood, or carpeting that we can barely conceive of right now,
• picking said wall paints, tile styles and colors, wood, and carpeting,
• deciding what appliances we’ll take or leave in the old place, so that we buy the right things for the new place.

Each decision by itself isn’t a big deal but it’s a relentless march of several decisions a day. Day after day, it’s been decision after decision, big and seemingly small.

Even the smallest decisions can have huge impacts, like when we decided to place our receptacle on that part of the bath wall. What we didn’t realize was that it would impact the height of the side splash, which affects the placement of the mirror, and so the mirror had to be smaller.

Or like the walls in one room aren’t straight because this is an old house but we didn’t realize it until we had already purchased our flooring and so the wider floorboards look terrible. It’s going to be fine in the end but each hiccup takes away precious brain processing space.

The money

We’ve burned through all our cash savings now and have blown through the personal loan fund from a very dear friend. We’re incredibly lucky to have this resource, and incredibly grateful, and you bet your buttons that my checkbook is ready to repay them as soon as we have the funds back.

My stash is keeping me sane, but it’s still frustrating to spin our wheels financially. We can’t do anything but keep trying to get the work done here, the work done at work, and not spend beyond reason. We are spending, though. We’re spending on the house, we’re spending on selling the old place, we’re spending to keep ourselves fed day to day.

We’re not buying any more than is strictly necessary for a functional house. It’s going to be prettier than I was looking for, but these were all careful selections of things that were needed to consider the place finished. We couldn’t very well run around on a house with no floor!

Seeking serenity

I’ve been working hard at maintaining my Zen. Really really hard. Lots of deep breathing, lots of biting back grouchy words when I’m about to lose my temper.

I’ve inherited two legendary tempers, it’s taken decades of practice reining it in. If it should get loose, watch OUT. Thus, legendary control, my friends.  Fraying a bit around the edges, but still holding on.

The occasional craving is now being entertained. We bought the fancy cheese and it’s a minor miracle we still have some Brie in the fridge. PiC was shocked to come home and find half a wedge left.

It feels like this slog is endless and that’s what’s kept me going. As long as it felt like I had time to get it all done, the stress was about keeping a lid on my impatience to be done. Once we hit the halfway point, though, it meant that the pressure was really on to see it through to the end.

I’m amazing at getting through things, but I’m not great at being finished with them. In this case, it’s because being finished with the reno means a whole new world looms in front of us: moving, leaving our home, making a new home, and CHANGE.

I hate change. My oh my do I hate change. Isn’t that rich, coming from someone who works on change every day?

:: Do you love or hate change?

Before: Background, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7

Next on our Home Buying Adventure: Part 9, Part 10, Part 11