irvine_home_owner_IHB
New member
This will probably be the last in the series since it's now become more disjointed than organized:
This is the tale of how we sold our house in a down market and became renters:
Part 1: Kool-Aid Detox <a href="http://www.irvinehousingblog.com/forums/viewthread/4017/">http://www.irvinehousingblog.com/forums/viewthread/4017/</a>
Part 2: IPO Over/Under <a href="http://www.irvinehousingblog.com/forums/viewthread/4023/">http://www.irvinehousingblog.com/forums/viewthread/4023/</a>
So we are now in escrow and we push for one as quick as possible, but they set it for 30 days. I had my agent push for 2-week contingency sign-off so that we could look for a rental without worrying if the sale doesn't work out. We are confident it will close without problems because the buyers made sure their lender was set for funding before they made their offer. At least that's what we thought.
Two weeks later, the appraiser and home inspector come by the house. The appraisal is fine and comes in at contract price. In fact, the comps were priced higher than ours and were older houses with less rooms so that made the buyer more confidence. The home inspection has no major problems, just recommendations regarding updated building safety codes such as CO2 detectors, more GFCI outlets and other minor things. The beauty of having a house uncluttered, staged and clean is it puts the home inspector into the mindset that the house is well maintained and they are more apt to give you a favorable report. I was talking to him and he just came from a foreclosure that was trashed so our house looked like a brand new model home to him. And because we did a lot of prepping beforehand, the request list from the buyer was very small.
So we are thinking we are set and request the contingency sign-off when we sign back the request list. We don't get anything back for a week. We're not sure if it's our agent's fault or theirs but the silence worries us. We then find out that their lender is now having a hard time passing them through underwriting... crap. We are told the buyers are talking to another lender and also have one more backup.
As for our rental situation, we've spent the last month looking at different places and have a short list of about 5 houses. Our number 1 pick, although not the best place, is sufficient for our needs and in the area we want. We talk to their realtor to ask if there are any other offers and that we will probably rent it but are just waiting for lender docs from our buyer. He is confident we should be able to rent the place if we do so within the next week.
So now it's a waiting game. Monday rolls around and we find out that our buyers have to change lenders... double crap. Our agent tells us that this will probably add another week or two to our escrow and since we won't get a contingency sign-off, to wait before we sign any rental contracts. Great. We hope the FCB offer is still interested but our agent advises us to wait until next week before putting our house back on active status.
Then guess what happens? 2 days later on Wednesday, escrow calls me and asks me my bank information because they have to request buyoff amounts. Why? Turns out the new lender was very fast and docs came in that day and the buyers signed. All they were waiting for was funding and that escrow could actually close as early the following week which was actually sooner than our original escrow close date. It could have actually closed that week but it was Thanksgiving so it had to wait until after the holiday. This was a pleasant surprise right? Well... yes and no. We checked the online MLS site and the rental we wanted was no longer listed. Our agent called and confirmed that the owner could not wait any longer and went with their 2nd choice. They were sad to hear that we were ready because they preferred us over their new tenants who I think were students. That put us in an immediate panic mode as we would be homeless in a week.
Luckily, our buyers understood the situation we were in since they would not sign off on contingencies and agreed to rent-back their property. At first they were only going to give us a week but considering we had to start over, they gave us three. Things were still up in the air because stuff could happen before actual funding so we were still worried. The following week came and... no drama. The loan funded and I became an ex_irvine_home_owner.
With that out of the way, we went on a rushed quest to find a rental. That's its own story and maybe I'll post it if anyone is interested but it was quite a headache. That being said, we are now renting and are hoping to see prices come down to more fundamental values.
Lessons learned:
1. Use an area agent:
Our agent was great, but the local knowledge and familiarity with other local agents is worth so much. In addition, communication is much easier when it comes to signing documents etc etc. Talking to IR2 and reading about how he helped IPO and usc has convinced me to give him my business next time around.
2. Stage, stage, stage:
Even if you don't want to pay for one and think you can do it yourself... do it. Remove ALL personal items and clutter and clean EVERYTHING. The less you have, the better. But don't go too sparse, you still want to give the prospects an idea of what an area is supposed to be used for. It also makes a place look more like home if you don't have a bunch of empty bedrooms.
3. Price accordingly:
I think we may have been too high as a price closer to what we ended up getting would have generated more offers and gave us more backups. We were lucky that our first offer worked out but imagine the pain if it didn't and we had not serious backup offer to step in.
4. Get that contingency signed early if you are planning to rent:
I know this is hard to do with the credit restrictions today, but our process would have been much easier if we had more lead time to secure our housing situation earlier.
5. And this last one isn't really about selling but about buying:
We certainly could have stayed in our home as our payments were affordable. Our problem was that we were so scared of getting priced out, we settled for the home we thought was going to be our keeper. We should have been a little more patient but in a price inflation, it's very hard to do so. People are going to buy regardless of falling or rising prices and some may not want to wait until bottom because they found the perfect house for them. My only recommendation is to make sure it is the perfect house. We really liked our home, but it was just a bit smaller and was missing some features that kept us from keeping it. Otherwise, as long as buying costs more than renting, I really recommend just renting. A few months ago, I would have not said this, but considering how much money we lost on this house and had we decided to rent 3.5 years ago instead of buying... we would be in a much better situation right now. In fact, we would probably be able to buy a much nicer house right now and have the same payments.
Thanks for reading... and good luck to any of you who are thinking about going down the same path. Props to IPO and usc for setting the examples (esp to IPO since he gave me a lot of good information and was PMing me throughout the ordeal) and to IHB and IR for giving me the information to actually make this decision.
This is the tale of how we sold our house in a down market and became renters:
Part 1: Kool-Aid Detox <a href="http://www.irvinehousingblog.com/forums/viewthread/4017/">http://www.irvinehousingblog.com/forums/viewthread/4017/</a>
Part 2: IPO Over/Under <a href="http://www.irvinehousingblog.com/forums/viewthread/4023/">http://www.irvinehousingblog.com/forums/viewthread/4023/</a>
So we are now in escrow and we push for one as quick as possible, but they set it for 30 days. I had my agent push for 2-week contingency sign-off so that we could look for a rental without worrying if the sale doesn't work out. We are confident it will close without problems because the buyers made sure their lender was set for funding before they made their offer. At least that's what we thought.
Two weeks later, the appraiser and home inspector come by the house. The appraisal is fine and comes in at contract price. In fact, the comps were priced higher than ours and were older houses with less rooms so that made the buyer more confidence. The home inspection has no major problems, just recommendations regarding updated building safety codes such as CO2 detectors, more GFCI outlets and other minor things. The beauty of having a house uncluttered, staged and clean is it puts the home inspector into the mindset that the house is well maintained and they are more apt to give you a favorable report. I was talking to him and he just came from a foreclosure that was trashed so our house looked like a brand new model home to him. And because we did a lot of prepping beforehand, the request list from the buyer was very small.
So we are thinking we are set and request the contingency sign-off when we sign back the request list. We don't get anything back for a week. We're not sure if it's our agent's fault or theirs but the silence worries us. We then find out that their lender is now having a hard time passing them through underwriting... crap. We are told the buyers are talking to another lender and also have one more backup.
As for our rental situation, we've spent the last month looking at different places and have a short list of about 5 houses. Our number 1 pick, although not the best place, is sufficient for our needs and in the area we want. We talk to their realtor to ask if there are any other offers and that we will probably rent it but are just waiting for lender docs from our buyer. He is confident we should be able to rent the place if we do so within the next week.
So now it's a waiting game. Monday rolls around and we find out that our buyers have to change lenders... double crap. Our agent tells us that this will probably add another week or two to our escrow and since we won't get a contingency sign-off, to wait before we sign any rental contracts. Great. We hope the FCB offer is still interested but our agent advises us to wait until next week before putting our house back on active status.
Then guess what happens? 2 days later on Wednesday, escrow calls me and asks me my bank information because they have to request buyoff amounts. Why? Turns out the new lender was very fast and docs came in that day and the buyers signed. All they were waiting for was funding and that escrow could actually close as early the following week which was actually sooner than our original escrow close date. It could have actually closed that week but it was Thanksgiving so it had to wait until after the holiday. This was a pleasant surprise right? Well... yes and no. We checked the online MLS site and the rental we wanted was no longer listed. Our agent called and confirmed that the owner could not wait any longer and went with their 2nd choice. They were sad to hear that we were ready because they preferred us over their new tenants who I think were students. That put us in an immediate panic mode as we would be homeless in a week.
Luckily, our buyers understood the situation we were in since they would not sign off on contingencies and agreed to rent-back their property. At first they were only going to give us a week but considering we had to start over, they gave us three. Things were still up in the air because stuff could happen before actual funding so we were still worried. The following week came and... no drama. The loan funded and I became an ex_irvine_home_owner.
With that out of the way, we went on a rushed quest to find a rental. That's its own story and maybe I'll post it if anyone is interested but it was quite a headache. That being said, we are now renting and are hoping to see prices come down to more fundamental values.
Lessons learned:
1. Use an area agent:
Our agent was great, but the local knowledge and familiarity with other local agents is worth so much. In addition, communication is much easier when it comes to signing documents etc etc. Talking to IR2 and reading about how he helped IPO and usc has convinced me to give him my business next time around.
2. Stage, stage, stage:
Even if you don't want to pay for one and think you can do it yourself... do it. Remove ALL personal items and clutter and clean EVERYTHING. The less you have, the better. But don't go too sparse, you still want to give the prospects an idea of what an area is supposed to be used for. It also makes a place look more like home if you don't have a bunch of empty bedrooms.
3. Price accordingly:
I think we may have been too high as a price closer to what we ended up getting would have generated more offers and gave us more backups. We were lucky that our first offer worked out but imagine the pain if it didn't and we had not serious backup offer to step in.
4. Get that contingency signed early if you are planning to rent:
I know this is hard to do with the credit restrictions today, but our process would have been much easier if we had more lead time to secure our housing situation earlier.
5. And this last one isn't really about selling but about buying:
We certainly could have stayed in our home as our payments were affordable. Our problem was that we were so scared of getting priced out, we settled for the home we thought was going to be our keeper. We should have been a little more patient but in a price inflation, it's very hard to do so. People are going to buy regardless of falling or rising prices and some may not want to wait until bottom because they found the perfect house for them. My only recommendation is to make sure it is the perfect house. We really liked our home, but it was just a bit smaller and was missing some features that kept us from keeping it. Otherwise, as long as buying costs more than renting, I really recommend just renting. A few months ago, I would have not said this, but considering how much money we lost on this house and had we decided to rent 3.5 years ago instead of buying... we would be in a much better situation right now. In fact, we would probably be able to buy a much nicer house right now and have the same payments.
Thanks for reading... and good luck to any of you who are thinking about going down the same path. Props to IPO and usc for setting the examples (esp to IPO since he gave me a lot of good information and was PMing me throughout the ordeal) and to IHB and IR for giving me the information to actually make this decision.
