To List the House or Not List the House, That is the Question

We were sooooooooo close.

We were so close to listing the house.

We’d decided against a realtor and for a listing service, which would give us a realtor-quality listing that would stay up until we sold the house.

We’d started packing and put items in storage to make the rooms feel bigger.

We’d taken the photos of clean and de-cluttered rooms.

We’d snuck onto realtor.com looking at houses in Georgia.

We’ve even come up with a list of Twenty Things to Do Before We Buy a House.

We were one day away from listing the house when the floor – a.k.a. the economy, fell out from under us.

Banks aren’t lending money. Credit card companies are reducing credit limits, affecting credit scores for even those with excellent credit histories.

Car dealerships are closing because no one is spending money to buy cars, and banks won’t give car loans to those few who do.

Now we’re unsure what to do. If we find someone willing to buy our house they probably won’t be able to get a loan, at least until banks start lending money again.

And if we do sell the house Husband has to find a job in Georgia before we buy a new place. After all, no lender is going to give us a mortgage with no income. And in this economy advertising agencies are laying people off, not doing much in the way of hiring…

On the other hand, no one’s going to even want to buy our house if they don’t know it’s for sale. I’m also thinking that sitting on the market for awhile will not have the same stigma it has had in the past. Almost all houses are languishing, aren’t they?

So, what’s the smart decision? Do we list the house and take those risks? Do we put it on the market even though no one is buying and we’re uncertain about the future of everything?

Or do we wait, for our home value to decrease more, staying in a place we don’t want to be, and wait for things to get better while we sit here uncertain about the future of everything?

Stay tuned.

Twenty Things to Do Before We Buy a House

I’ve spent lots of time thinking about selling our home here and moving to another state. The market is worse here than almost anywhere else in the country (we also boast having the highest foreclosure rate – don’t be jealous!), so it doesn’t look like it’s happening anytime too soon.

Still, it’s good to have a plan, and I have plenty of time to come up with one.

When Husband and I are finally ready to start looking for a house in our new home state there are a few things we will be sure to do, some of which we didn’t do in out first home buying process.

Before We Start Looking

These are things we will do before we actually go see any houses.

1. Familiarize ourselves with the area. We are still debating on whether or not to rent for at least six months first. I know it’s a good idea, but the thought of moving and doing it all again six months or a year later is so unsavory. On the other hand, it would give us time to really know the area, and not have to rely on the recommendations of friends and family whose preferences may not be the same as ours.

2. Know our credit score. We’ll be making sure our credit reports are accurate. We’re not planning on getting pre-approvals, as we don’t want anyone pulling our credit (and thus lowering our credit score) until we’ve chosen a lender. By knowing our score and income, and given our complete lack of debt at that point (our only debt is the mortgage on our house here), we can get a good idea of what interest rate we will realistically qualify for, and what kind of mortgages are available to us.

3. Know how much house we want to buy. We are huge proponents of living below our means, and just because a lender is willing to lend us $300,000 doesn’t mean that’s how much we want to borrow. Our goal is to take the equity (falling every day) we have in our current house and try to keep our mortgage payments about the same as they are now. Our mortgage is currently 12% of Husband’s income, but we know we’ll be taking a pretty big salary cut when we move. We’d like to keep the mortgage at 25% of his income or less. We won’t know our exact numbers until we sell this house and Husband gets a new job.

4. Compile a list of requirements. Our list is broken down into Must Have, Preferred and Wishes. We Must Have at least 3 bedrooms, but a 4th is Preferred. A Den or other Bonus room is one of our Wishes. So is having a laundry room on the second floor. You get the idea.

5. Hire a buyers agent. This is one of the most important things we’ll do this time that we didn’t do last time. There are seller’s agents, buyer’s agents and dual agents (represent both sellers and buyers). When buying a home I’m going to have a buyer’s agent. A buyer’s agent is ethically required to do what’s in our best interest in the real estate transaction. They represent us and only us, and cannot be in collusion with the seller and/or his or her agent. We won’t be afraid to sign a non-exclusive contract, but we’ll be sure to read and understand it first. An experienced buyer’s agent is going to understand the market, know where the bargains are and know how to whittle 1000 possible listings down to the five to ten that most meet our requirements. They won’t try to push their own listings on us; no trying to fit a square peg into a round hole. That will save us tons of time, tons of money, and tons of stress.

6. Do our own research. We’ll look on the internet for information about the neighborhood, schools, crime. Sites like Homefair are chock full of useful information. We’ll also check the property appraisers website to get an idea of property taxes in the area we’re looking. Some areas (like the one in which we live) give homestead exemptions and longevity discounts that can make the current owner’s taxes artificially low, so we’ll want to make sure we’re getting an accurate picture of the taxes we’ll have to pay.

7. Get insurance quotes. They won’t be accurate, but if we can get an agent to give us an idea of the rates for the area we’re considering and the types of policies we’ll need (i.e. is it a special flood hazard area, necessitating flood insurance?) we can use the information as a factor in our decision.

Items to Bring When Looking At Houses

1. A Scorecard. We’ll use our Required/Preferred/Wish lists to make a scorecard for each house to help us keep track of the houses we’ve seen and for comparison purposes later.

2. A digital camera, an extra data card and extra batteries. We’ll take pictures of the neighborhood, the outside, views from the front and back doors, interior features we like, interior features we don’t like.

3. A cell phone charger. We can use this small electrical appliance to test electrical outlets. Oh, yes.

4. A tape measure. Will our furniture fit? How much wall space is there? How big of a refrigerator can I buy for the space? All good things to know.

5. Bottled Water. I don’t want to waste time having to stop for drinks.

6. Hand Sanitizer. I’m allergic to cats. And if a house looks dirty I’ll definitely want to use some. Blech.

Before We Put An Offer In

We hope to narrow it down to three houses, depending on the market and what’s going on with it. In some cases we may do these things after we put in the offer, but only if we have sufficient “outs” built into the contract.

1. Visit the neighborhood at different times of day. A neighborhood that seems quiet at 11am might transform into a noisy, motorcycle club and roving-teen-filled mecca at night. We’ll check out the neighborhood at random times of day -and week – to make sure it fits with our preferences. Another thing we’ll do is look for all of the ways to access the neighborhood so we can see the surrounding areas and any potential problem areas.

2. Talk to our prospective neighbors. We’ll go up and knock on the door. It’s not a time to be shy. These people will be living next to us for many years to come, and if they open the door and clouds of marijuana pour out we may want to reconsider our choice. You may not. Different strokes. We’ll ask about crime, difficult neighbors, renters, worrisome animals (a friend lives next door to a menagerie of very stinky, more-comfortable-on-a-farm-than-in-a-subdivision-type animals). What do they like best about the neighborhood? Worst?

3. Do more of our own research. We’ll check out the property appraiser’s website to get information about taxes and home sale prices. We can find out how many times the house has changed hands and how much was paid, and lots of other useful information that’s all available for free. Knowing how much someone paid for a home can be extremely useful when negotiating price.

4. Check with the city to see if there are any pending land use changes. A good friend bought a large home on a very nice piece of land, only to have a huge chunk taken away under eminent domain for a sewage system. The pending plan would have been useful to know before buying, methinks. The forty acres of woods behind our dream home could wind up being razed to make way for a WalMart. Zone changes happen, but we at least can protect ourselves as much as possible.

5. Check to make sure any renovations have received the proper permits and inspections. I know several people who were fined and/or had to rip out renovations, wiring and plumbing that were done without proper permits and were not up to code. If the homeowner can’t provide proof we’ll contact the city. If not permits were obtained that will affect our offer.

6. Check to see if there is a Homeowners Association. If there are, what are the fees? What services are provided for the fees? We’ll get a copy of the community rules, and decide if we can live with them. Is participation compulsory? My sister’s community has several homeowners refusing to pay their share, and the last treasurer embezzled funds. Oy.

7. Bring in the expert. Before I bought my current house I brought my stepmother (the most critical person I know) and my best friend (the most observant person I know) to get their opinions. It was my first house and I was nervous about taking such a big step. Next time we’ll bring a friend who is a building contractor to see the house, just to get an opinion on the construction and any issues we might have that way.

I hope there’s time to do all of these things. The market and other factors will dictate if we’ll get to each step, but I hope we do. Once the offer is accepted and we have a deal we’ll of course have lots more to do, which will be the subject of another post.

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