My House is For Sale. Or, Moving Forward Despite Nerves

Last Sunday my agent came over to give me feedback on the house and I signed the paper. Yesterday, around noon, my listing went live in the MLS. That afternoon I got a showing request for 3. Then another for 3:45, and another, and another… I didn’t get to go home until after 8. Then an agent knocked at 8:30, said they were running late and could they please see the house anyway? Today’s showing schedule isn’t as crazy (yet) but still pretty busy. Fortunately my youngest brother is going to be keeping the dogs out during showings today, I can’t afford to take that much time off of work.

When I signed the paperwork, I was nervous. My house isn’t as fancy as some of the fresh remodels nearby, although it does have some good points and is in move-in condition. But the back patio is still in progress, the sod guys didn’t come as scheduled because of some mix up (they should be there today), there’s still some debris from various projects on the side of the house, I never did clean the oven, and every other imperfection in the house stood out like they’d been highlighted in neon.

But I took a mental step back and a deep mental breath. The interior is clean, neat, and complete. So what if there are a couple of scuffs in the baseboard, most people won’t even notice or care. The backyard isn’t the neatest but the lawn is mowed and the unfinished patio is finished enough buyers can see what they’ll be getting. The front is tilled and clearly in progress as well. If buyers were put off I’d just keep working and later shoppers would see the finished product. I was still nervous but decided to push on.

Well, I don’t think buyers were put off. I already have word that one, possibly two offers are coming. Which doesn’t mean anything until I have them in hand and can see what they’re offering, but the feedback has been good.

So, I’m pretty much over my nerves about selling. I might have a contract this week, it might not happen until next, but I’m reasonably confident it will happen and soon.

But I’m still nervous about buying.

What if I can’t find what I want at the price I want? My main priority is the lot rather than the house, but I still want a house in solid condition. And if I do find something to buy I’ll have a higher mortgage. I’ve run the numbers a dozen times and I can afford it and still save, but… but… it’s more money to spend each month! The easy answer is to stay where I am but I’ve given this a lot of thought and I know the extra expense is worth it, but… but… it’s more money!

And what about the timing? I’m using my current house’s equity for the down payment so it has to close before my purchase’s closing. What if the contract falls through? Or what if I sell then the buyer withdraws and I’m stuck without a place to live. Which would be very difficult because I have 2 large dogs and although I have a few couches I could crash on they aren’t welcome in those homes and would have to stay at a kennel.

Just as with the selling process, my nerves will calm when I get going on the buying process. Once I have a contract I’ll know about how much I’ll get from the sale and won’t be working on guess work as much. I’ll start looking at actual properties and my fears that there will be giant holes in the wall hiding behind the pictures will recede and I’ll focus on more likely concerns. Not that I’d turn a house down because of some simple drywall issues, I’d just want to make sure it’s included in the price. There are worst things than having to board my dogs for a few weeks and renting while house shopping is a viable option as well.

I’m also nervous about the move itself, but that’s only because I have no idea what I’m buying. Once I have a house picked out and under contract I’ll get excited again when I can start planning out what to do with each room.

I don’t always handle change well, or at least the anticipation of change, especially when the future is up in the air as it is now. I know this, and I know the nerves will calm as each step becomes more concrete and the number of what-ifs is reduced. It can be a bit of a fight, but I need to keep my rational brain in control because if I let my nerves take the reins I’d never do anything new.

My Real Estate Story

In early 2009, I lived in a one bedroom apartment. It was an older but nice (to my low standards) apartment, I got along well with the manager, and it was was more affordable than many others in the area. It was my first time living without family or roommates and I was loving it.

Except for the noisy neighbors. And the noisy street. And sometimes even the neighboring complex was loud. I spent at least 6 months getting up at 3am to start work at 4:30am, which meant early bedtimes for me. Sometimes even ear plugs weren’t enough to drown out the thumping bass. Still, I learned to cope.

Then my idiot neighbor robbed my apartment. That was the final straw.

I had 6 months before my lease was up but I started looking at craigslist ads anyway, looking for basement apartments, carriage houses, garage apartments, or even small houses that might be affordable, anything where I’d have my own four walls. I didn’t find much, even carriage houses smaller than my apartment cost $200 more.

It was a good thing I’d started looking early because that gave me time to consider buying. I stumbled on some articles talking about FHA loans, which led to mortgage calculators showing how much I could afford, and eventually I took a plunge and talked to a mortgage broker at my bank. The result? I could afford a house!

The above process took several weeks. On one hand, I loved the idea of owning and being able to do whatever I wanted to the property. I helped my parents with enough house projects to know I could handle quite a bit of maintenance myself and having a yard would be worth having to mow. On the other hand, I was still a student with two years left and didn’t quite know what I’d do for a career when I graduated – what if Google wanted to recruit me? There are several clusters of tech employment in and around the city, if I stayed local I had no idea where I’d end up working.

Eventually I decided to pursue buying a house. The odds of Google calling were practically nil and having my own four walls and a yard was worth a commute. There’s enough work in the tech field locally that my chances of employment were very good. I also like the region and have no desire to move anywhere else.

The house hunt process was pretty bumpy. I bid on a few HUD homes but kept getting outbid. I worked with one agent who was totally clueless and lost me one house. Finally I found someone who knew what they were talking about and was actually interested in working with me despite my low budget ($100,000). That’s a tip I give any first time home buyer – get a referral if you plan to use an agent. And not just “my cousin is an agent,” but someone they’ve actually worked with.

Finally we found my house! It was listed at $92,000, my agent put a bid in for $80,000 plus help with closing costs, they countered at $88,000 plus closing with a note that there was another offer but mine was first so I got first crack at the counter offer. I accepted, and the house was mine!

I bought the house with a 30 year FHA loan and put 3.5% down. I’ve been paying $36/month for Private Mortgage Insurance (PMI) on top of the principal, interest, tax and insurance (PITI) payment. The PMI can be removed this summer when the mortgage is 5 years old and my loan to value ratio is at least 80%.

I love owning my own home. There’s a certain freedom in knowing that it’s yours (and the bank’s) and being able to make changes as you want. There’s also more responsibility, when something breaks you’re the one who has to fix it or pay to get it done, but I even enjoy that part of it. My insurance company told me to replace the roof or they wouldn’t cover the house, so I did the job myself. I’ve impressed quite a few people with it, even the city’s inspector.

Even though the market was at the bottom there wasn’t a lot of inventory in my price range, but I was still picky about certain things. I knew I would have a hard time affording major repairs so I avoided houses with shoddy work visible, clear signs of foundation troubles, or just big question marks, as in “what will it take to get rid of that smell”. My house was a “toucher upper” with good bones and solid construction. It fit all my needs and most of my wants with enough room for future growth. It’s near 3 interstates giving me easy access to most of town. In short, it wasn’t my dream home but it was someplace where I could settle in for a while. I also got it for a great price and expected to build equity quickly.

There’s an element of luck in there, but I was right about all of the above. Especially the equity – after less than five years my house is now worth at least $150,000. Looking at recent listings, maybe even $160,000.

The short version of all the above?

  • I got tired of apartment living and wanted a house.
  • After a tumultuous search I bought a house for $88,000 with 3.5% down.
  • That house is now worth $150,000-160,000.
  • I’m getting ready to sell. Wait, I haven’t gotten that far yet.

I like my house, but it isn’t where I want to live for the rest of my life. I want space, privacy, elbow room, trees, fresh air, a yard large enough I don’t have to worry about throwing dog toys over the fence. I want views, nature, and no light pollution so I can buy a really nice telescope. Do I have to get it now? Of course not. But if I believed in astrology I’d say that the stars have aligned to make this the right time.

And so I’ve been getting the house ready to sell and should have it listed next week. Once I have a contract I’ll start looking for my next (and hopefully last) house and try to time the closings so that I buy right after I sell. Is taking on a more expensive mortgage the best financial decision? Nope. Will it be good for my mental health and well-being? Absolutely. And for that, it’ll be worth it.

DIY Painting Budget Considerations

I’d say all my free time has been spent on the house but that implies that I’ve had time that could be considered “free”. It’s been worth it though, I have just a couple little things to do and it’ll be ready for the market. Since I’ve been so focused on home improvement I thought I’d do a post about it.

Painting is something just about anyone can do, is relatively inexpensive, and most mistakes can be easily fixed. Changing the wall color in a room can have a huge impact as well, more so than hanging a picture or adding an area rug.

There are plenty of sites that can teach you how to paint better than I can, but here are some money tips. I’m no expert, but I have painted almost my entire house (everything but the ceilings) and I used to work in KMart’s paint department.

Prep Work Is Priceless

The biggest hazard with painting is getting the paint places where it shouldn’t be. A .7mm drop cloth is fine for mild use but if you’ll have a lot of traffic and ladders it’s likely to rip, which you really don’t want if you’re painting over carpet. Splurge on a thicker, more durable drop cloth instead. If you’re painting over tile, laminate or other solid surface flooring you could choose to skip the drop cloth but be prepared to deal with paint getting into the seams, grout and other hard to clean places. Basically, you should assume that you will be dripping on the worst place possible.

Painters tape is well worth it as well. Unless you whip out a razor sharp edge in no time, but if that’s the case you probably don’t need any tips I can give you. Regular masking tape works too but leaves behind adhesive residue if left on for too long. The narrower rolls are cheaper, of course, and I usually just use the 1″ stuff, but wider gives you more protection. If you plan to slap paint up as fast as possible, get at least 2″ wide tape. You can go without tape if you’re very careful, but expect to spend a lot more time on edging. Seriously, a lot.

One more quick, not really money related note: clean your walls thoroughly before painting. It will save you a lot of work later on.

The Paint

If you want your paint to last a while, don’t use the really cheap stuff. I’m talking about the $10/gallon stuff KMart sells (or used to sell). It doesn’t cover as well and doesn’t last. The mid-grade stuff you find at the hardware store is good enough for just about any project. A flat finish is usually the cheapest but glossier sheens are easier to clean. Spend the extra few dollars per gallon to get the finish you want.

If you have new, unprepared walls, tough stains, or are painting over different colors with the same new color, consider getting a paint and primer. It’s more expensive per gallon, but you’ll use less and it’s still less expensive than doing a separate primer.

If you don’t need a specific color take a look at “oops” paint. Depending on the person manning the paint station, they might even be able to add some extra tint to make it closer to what you want. The only problem is that if you have to buy more you might not be able to get the exact color, so make sure you get all the paint you’ll need first.

Applying the Paint

The faster the method is for getting the paint where you want it, the more paint it uses. Paint guns over spray like crazy and require much more prep, especially inside, but they’re very fast and almost necessary on surfaces with deep textures. They also use a lot more paint. A good paint gun will cost $100+, although my cheap Harbor Freight gun was a bit more than $20 and did the job just fine.

Brushes are the slowest, use the least paint, and give you the greatest control. Foam brushes are the cheapest but generally can’t be reused. They used to be my go to for most painting but I’ve now fallen in love with bristle brushes. A good bristle brush is more expensive but you can get a lot more use out of it and the coverage will be better as well. Even my dollar store brushes are better than the hardware store’s more expensive foam brushes. In short, skip the foam and get a decent bristle. You’ll need at least one for edging and possibly touchup.

Rollers are my preference for the bulk of interior paint jobs. The really cheap roll covers are a bit of a gamble so I typically go mid-grade. High grade rollers are a bit better at holding paint and are more durable, but I don’t reuse my covers so it isn’t worth the extra to me. I used to use the thin 4″ rollers for small areas but found that they had terrible coverage and required 2-4 coats instead of 1-2. I’ve now switched to using 4″ rollers that are the same diameter as the full size. For the roller pan, buy something firm enough to stand up to the pressure. I hate cleaning paint stuff so I typically buy the cheap biodegradable pans and throw them out at the end of the project. They can be reused several times, but can easily be damaged in storage.

Hired Labor

Painting can be a one person chore but if you have a lot to do why not make a party out of it? Call your friends and family, or post the date on Facebook, and offer pizza and beer (or soda) to those who help. The job will be done faster, you’ll have more fun, and I think the extra cost is well worth it.

Or, you could hire pros. Which wouldn’t make it a DIY job anymore, but sometimes it’s worth paying people to do things that a) you don’t have time for or even b) you really don’t want to do. This assumes you can afford it, of course. If money’s tight, do it yourself or live with current wall color. Painters come in a variety of qualities and costs, so make sure you get some good references instead of calling up a company because they posted on craigslist.

As with any project, you can get it fast, good, or cheap – but only two at a time. It’s up to you to decide what your priorities are, although I wouldn’t recommend leaving the “good” out.

I’m Not Sweating My Debt, but Sometimes You Should

If you listen to some financial experts they’ll tell you that debt of any kind is an emergency, enslavement, or other terrible thing. Some make an exception for a mortgage but still insist it be paid off ASAP. A few go as far as to talk down to anyone who ever borrowed money as if they were fools and idiots.

I disagree.

Going to school was a terrific investment. A year after I graduated my income had doubled, I’m in a job that I really enjoy, and I have many more options in my career path. The formal education also gave me a lot more confidence in my skills and has helped accelerate my job growth. The minimum payment is easily manageable and doesn’t block me from being able to do other things. I’m on the standard 10-year repayment plan and will have it paid off years ahead of time.

My car loan wasn’t as smart and although I have some regret there it isn’t enough to make me hate the payment. I was at least somewhat smart about getting the loan – I bought an inexpensive car, did enough research that I got exactly what I wanted in the car and it has a low interest rate. I also made a large enough down payment that I haven’t owed more than it’s worth. When it’s paid off, however, I will start setting aside cash for my next car. Which hopefully won’t be for at least another 10 years because I really do like my car. I don’t live in the city so a car is pretty much a necessity.

I’m very glad I bought my house. It was cheaper than renting and I really, really love having my own four walls. A discussion over whether a mortgage is a good thing or not is a whole ‘nother post, but I do think a house is one of the few things where a loan is ok. Within reason, of course, and it should be paid off eventually, but a house will usually retain or even build equity as you pay it off and will return something if you sell. If you don’t buy you still have to pay rent and you get nothing back from that. (Not that buying is right for everyone, but it was for me.)

I think the biggest reason I’m not sweating my debt is because I know it will be gone. It’ll take a few years but I’m not looking at lifelong “enslavement” to my loans.  My balances get lower every month and I have the tracking spreadsheet to prove it. If I was pushing to get them done as fast as possible and stopped spending money on all fun, then I’d feel like a slave.

When should you sweat the debt?

When the balance is growing or stagnant. If you can’t make progress on the principle, or if you add more than you pay each month, it’s time to do something different.

When it has a high interest rate. For me, that’s anything over 7% or where the monthly interest accrual is at least half your payment. This includes the rate that will be in effect after an introductory period.

When it has a high minimum payment relative to your income and savings. If you lose your job will the debt become a burden?

When it’s obstructing other parts of your life. If you can’t save for vacations because of the payment, time to start kicking it in the butt. If you want to take a better but lower paying job, if you can’t qualify for a mortgage because of your debt to income ratio, you know what to do.

When it stresses you out. Why would you want to keep something around that causes stress?

When you’re worried you’ll be paying it off forever. Worry is a kind of stress and tackling it head on can help ease the fear.

When you hate the debt. Maybe you do feel enslaved every time you send in a payment. Maybe you regret what you did to collect the debt. Don’t keep things you hate.

Debt is a tool and like any other tool it can help or hurt. Sometimes both. Ever get hit by a piece of flying wood that got caught in the saw? The board got cut, but so did you. The key is to plan ahead, wear safety glasses and be careful.