Home Personal Situation Housing Update 5 Months Later

Housing Update 5 Months Later

by My Journey to Millions

It has been 5 months since The Wife and I decided to take the plunge and put our house on the market.  Writing that makes me feel a whole hell of a lot better since it feels like infinity longer as The Wife is completely fed up with the process.

My Housing Situation

It wasn’t until three or so years after I started blogging that I first started talking about home and it wasn’t until a few months ago where I provided real details:

  • The home has to be owned by a first time home buyer (follows the deed)
  • 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 (the 55+ Part of the community sold before the bubble burst at $500K+ and is probably around $450K currently).
  • At the time of my purchase I had to make under a certain amount which I cleared by $200 and I wasn’t married yet.
  • I got a fantastic rate of 5.875% which seems high today and we put down $17,500 (Nope no PMI under the program!).  It was 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.

The house, while an awesome buy came with some restrictions:

  1. We had to make under a certain amount, which I did because I wasn’t married at the time.
  2. 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.
  3. I could not rent the property (if I could you’d be calling me landlord Evan today)

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!

While the first time home buyer restriction follows the home the income requirement does not…sort of.  I only need to provide the controlling non-profit 60 days to sell it with the income requirement and since this post is being written 5 months after my original one you can guess they failed.

A Recap thus Far

Within 75 days we had four great leads on the home and had our choice of buyers. Think about that in this market, we were still in control!  Those four buyers were:

  1. 27 Year Old couple both teachers in the city
  2. 41 year old couple – second marriage Wife owned a home before Husband’s name was on it
  3. 52 Year old divorced male
  4. Elderly Indian woman

We eventually went with the 41 year old couple as they seemed super excited and very stable.  Turns out that the problem of one of them owning a home in the past caused more of a problem then first assumed as their debt to income ratio was completely out of control (the calculation counted all their debt but only one spouse’s income).

For what its worth:

  • The Elderly Indian Woman couldn’t make a decision until her son got back from India, and then she was in the hospital for a bit and at this point we have lost touch
  • The 52 Year old divorced male is still in the running (see below) although he was out for 3 or so months after he gave a TERRIBLE offer.
  • I don’t remember the 27 year old teachers! Maybe The Wife can shed some light on it

After the 41 Year old Couple fell through we decided to hire a broker.  Well looking at the date of the post it looks like that lasted all of 3 weeks.  Very nice woman, but we tied her hands by giving her such a small percentage. She was unable to list the home on Multiple Listing Service with only 2% to split between her and a seller’s agent.

Where we Are Going and Our Next Decision

Since letting our Agent go, we found a really cool way to list our home on our own on MLSLI (Long Island MLS), Trulia, Zillow, etc.  There are services that will let use borrow their real estate license to post on those sites.

Listing on MLS with No Seller’s Agent

All I did was Google “List on [my local MLS] without a broker” and I received all viable options on the first page of results.  After researching my options I went with one where the total price was $200 plus if the person coming in with a realtor I have to pay the realtor 2% and if the person who I sell to doesn’t have a realtor I owe no broker commission!

There was a ton of paperwork, but I guess that is to be expected.

Our Current Possible Home buyers

We have a few “options” up in the air:

  • 52 Year Old Divorce Man is back! I am negotiating with his mom and uncle (family money) which is just freaking weird.  I have never received a firm offer yet. It has turned from Uncle purchasing the house for the individual with cash which would be nice, to him just giving the down payment.
  • 25 Year old Man – He graduated from the same college as me and is just working his first job which is around the block from where I live. I’d love to sell it to him, but doubt it will happen.  I have not received a firm offer but he has put in his application with the non-profit who still has to approve any buyer.
  • 35 Year old Couple with a Son – They loved that my son’s room was already set up for a boy.  They have not put their application in yet, but have made an offer.  They will give me full price but want closing cost credits.  I am not going to accept this offer. I think my response after hearing from some of the others on this list is to say $303,000 no closing cost credits or $306K with 3K in concessions.
  • 23  Year Old Woman – The Wife showed the place to her parents twice. Dad is buying the home. No firm offer but their application is in.  The problem is that they came with a broker and the others did not – so they are going to get 2% which brings my net down to $300K even if they pay full.
  • 37 Year old State Trooper – No offer, no application but seems interested.  Terrible with call backs so not sure his deal.

Phew! Long Update.

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Financial Samurai 08/09/2012 - 11:07 am


I hate to be the voice of reason, however if your home hasn’t sold after 5 months on the market, it seems clear to me at least you have priced it too high.

I understand your house has restrictions on max selling price. And as a buyer, s/he also has restrictions on their selling price. Hence, the price should also follow the market within the restrictions!

Hence, if market sold homes are selling for 10% less, then shouldn’t your house be selling for $225,000-$265,000 maximum? Is the program you participated in a charity of giving people an extra $50,000?

Do the buyers know what you paid? Just lower the price to clear the artificial market.


Evan 08/09/2012 - 11:15 am

I don’t mind a voice of reason – I often need it!

The only reason I’ll disagree with you is because there are homes that sold in the last few months that have hit the maximum price. They are all the same units its just getting in front of people that seemed to be my problem at first. The first 60 days we were under the non-profit so if we don’t count that I am at 90 days.

The other thing is that I don’t have to go anywhere. We didn’t buy a home yet because I was TERRIFIED of the double mortgage problem. So if I am not getting the bottom line number I want I am just not going to leave.

One buyer did know about the price and he tried to use that in negotiations with me (the father of the 25 year old male). I think he tried to make me feel bad that I was making a profit during this housing market. I gently reminded him that there were comps at that max price.

Financial Samurai 08/09/2012 - 1:51 pm

I’m just giving you the perspective from a buyer. If my own gains are locked in e.g. can’t buy for $300,000 and sell at natural market price of $450,000, but only $350,000, then I am not that excited about paying $300,000.

Everything is rational. Since you don’t need to move, you don’t need to sell. The pain of going through a long home selling processing is not enough for you to lower the price.

The problem is “stalefish.” The longer the home sits, the more discount the buyers want. What buyer would be willing to pay your asking after discovering it’s been on the market for 5 months?

I think the answer is clear. You guys don’t really want to sell the house. If you did, you would!

Best, Sam

Evan 08/09/2012 - 2:22 pm

“then I am not that excited about paying $300,000.”

If you are thinking about it in terms of a pure investment then you are correct, but I think we both can agree that *most* people do not think about it like that when it comes to their main residence. In the town the home is, there are only 2 other properties besides the ones in my neighborhood (probably uninhabitable) at that price point.

You are correct insofar as the pain thus far (i.e. just The Wife’s annoyance of the situation) is no where near the pain of taking a hit with a price adjustment.

Investor Junkie 08/10/2012 - 5:07 pm

The problem in his case is there are too many restrictions on selling the house. It’s definitely below market value for that area.

AverageJoe 08/09/2012 - 12:19 pm

Wow! I can see why your wife is fed up with the process. It seems WAY convoluted and frustrating. I don’t know, though. You have a lot of leads now, so hopefully it finishes well. BTW, I think it’s funny the guy used the price you paid in his negotiation. Nice tactic, wrong audience.

Evan 08/09/2012 - 12:46 pm

I think I would be more annoyed if I didn’t just love where we live right now. The main downfall to place is the boy doesn’t have a yard, but I am at work all day so I don’t see that frustration day in and day out.

Jeff 08/09/2012 - 12:19 pm

Well, that stinks but I’m glad you’re back into it with a few people. Sam could have something here – you way want to consider knocking the price down a bit – even 5-10k and see what happens. The fact that you’ve got nowhere to go and all day to get there works in your favor though.

Evan 08/09/2012 - 12:53 pm

We aren’t in a rush per se so its hard to just throw away 20% of our gain just to get out quicker. I think I would be saying something different if we had 2 mortgages OR if I were buying a cheaper place, but no matter where I go the mortgage per month and taxes will be much more

Kathleen 08/09/2012 - 4:10 pm

Oof! So is your wife not on the mortgage then, or does she make under $200 a year?

Evan 08/18/2012 - 12:48 pm

My wife is not on the home (mortgage or deed). Actually interesting story about that. It was her grandparents who had given her the money over her life that we used for the down payment. She SMARTLY made me draft and sign a document saying that if we didn’t get married (we were engaged) I’d owe her the down payment.

It all worked out!

Em 08/09/2012 - 4:39 pm

I say hold on to the house until you get what you want for it or are ready to move full speed ahead with getting a new place. If you are content where you are but would move if the right amount was met then I see no reason to lower the asking price

Evan 08/18/2012 - 12:49 pm

I couldn’t agree more Em!

Lance 08/09/2012 - 9:26 pm

That sounds super complicated. I hope everything works out for you though… how much longer can it take?

Evan 08/18/2012 - 12:50 pm

No clue I guess theoritically it could take years just like any other house sale. We will hope it doesn’t

Kim 08/10/2012 - 1:13 pm

We live near a resort area, and they have several deed restricted homes that sound similar to your situation. You have to have worked in town for two years, make under a certain income, and you have to own if for a certain amount of time and can only resale for marginal profit. I’ve never tried to buy one, but it seems super complicated. For what it’s worth, though, they always sell, and buyers are just trying to find a way to live there and don’t really care about return on investment.

Evan 08/18/2012 - 12:52 pm

While it is complicated and a bit inefficient I, like them, would do it ALL over again.

Jenna 08/10/2012 - 4:28 pm

Sounds like you have some good candidates! Can’t wait for the next update: SOLD!

Evan 08/18/2012 - 12:53 pm

I know I am only responding 8 days later, but no such luck so far

Cassi 08/11/2012 - 8:30 pm

My grandparents just sold their home. I say, keep it on the market and go for it! It seems like people are interested, so you just have to play the waiting game right now…

Evan 08/18/2012 - 12:54 pm

It is a terrible game lol

Monevator 08/14/2012 - 4:41 am

Tough ride Evan. I think the problem here is that you have an already illiquid asset made even more illiquid by the restrictions placed upon it.

Of course, that’s what enabled you to buy it at the start, too, and enjoy five years in it, so swings and roundabouts.

But I’d have to agree with those who say the price may be too high, if it’s still around after five months (assuming you’ve staged it properly etc). It’s almost correct by definition! And looking at what made you decide to buy it, you yourself cite the below market rate price for the property. Perhaps for houses like this, with these restrictions, below market rate *is* the rate.

Of course prices can change fast with perceptions changing, and if you don’t need to sell then you may profit from hanging on. 🙂 My perception from afar is that US housing has bottomed, fwiw.

Good luck!

Evan 08/18/2012 - 12:58 pm

“I think the problem here is that you have an already illiquid asset made even more illiquid by the restrictions placed upon it.”
– Exactly why we didn’t throw anything above the mortgage than the minimum we had to.

“Perhaps for houses like this, with these restrictions, below market rate *is* the rate”
– I guess we will never know only because the price restriction is there. So it is not like I could test the market myself.

No matter what I am pulling a profit out, but considering a drop of $10K or whatever will directly affect my next home purchase (If I buy a $500K home it is 2% of the next house) and since I am not in a rush I figure why not hold on.

mary w 08/15/2012 - 2:09 pm

I think i’ts time to get a good realtor and pay them the “going rate.” Trying to go it alone and then cheaping out on the commission hasn’t gotten your house sold.

A good realtor should be able to give you a better idea of whether your is really appropriately priced given the deed restriction and deal with looky-loos or those with a casual interest in your house. You thought you had your choice of buyers when you just had at few lookers.

I’m not a realtor but have bought/sold a lot of homes over the years.

Evan 08/18/2012 - 1:07 pm

You are 100% correct Mary, but I can’t price in the realtor and that is my real issue.


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