NinjaPigeon - My Flight to Financial Independence

Monday, July 03, 2006

House sold!

Finally, I'm free from that house. I haven't blogged about it much, but I really haven't had a great experience in home ownership. Bare with me while I recount what made it that way, and the lessons learned.

In early 2004, I started reading about real estate and was very interested in doing invemestments in it. I tried to do a short-sale on a property, but it fell through literally at the last minute. However, I was confident that I could make money in real estate, so decided I'd start off with my own home. This would allow me to take advantage of first-time buyer programs and to learn more about the loan process.

My friend and I decided we'd buy a house together, trying to get it under market value, and then rent it out after we'd lived there a year or two. Well, we bought a house, though I'm pretty sure we ended up paying 100% of market value. Our loan officer was either grossly inept or devilishy clever. I very much suspect the latter.

Anyway, from day one we had problems. The AC was very shakey. It broke on us no less than 5 times in the 20 months I lived there. Luckily the bulk of the repair costs were covered by our home warranty.

Other problems with the house were mainly due to the poor upkeep of the previous owner. We had plans to do this grand fix-up of the place, but it never happened. Neither of us were particularly experienced at home repair, nor did we have enough money to do it right. So our house was pretty crappy compared to the neighbors.

Finally, in February, I moved out and we began trying to sell the house. We painted most of it ourselves (and didn't do the best job), and then had new carpet/vinyl installed. Then we listed it with a friend and waited.

At the very end of May we got an offer, and they wanted to close on the 19th of June. The inspection came back with just two problems - a few blown off shingles and the AC was not blowing cold. Well, the shingle problem was only a $100 visit by a roofer. The AC problem of course ended up costing us $1500 to replace a leaking evaporator coil.

Anyway, the house did close on the 19th, even with my friend out of town. I ended up signing for him with a power of attorney. We lost $9400 in commission, which left us with a check for $4150. Definately not the greatest profit for almost two years of work. At least the mortgage company is supposed to be mailing us the balance in our escrow account, which is another $900 we can split.

Regardless, I've learned a lot from this experience. I learned that I'm fully capable of selling the house myself next time, saving half of the commission. I learned that loan people are shady, and you need to scrutinize what they tell you very closely. I learned that home warranties are very much worth it. I learned that you should keep your house in tip top shape at all times, as otherwise you end up with a much larger repair bill when you go to sell.

Next house I get, I'll be ready!


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