Real Estate Math

Giggles has notified me of impending doom if I don’t blog soon. We’ve been very busy for the past couple months. At work I’ve been training a new employee, and it’s really been cutting into my regular blog time. Outside of work we’ve been buying a house, well condo actually, and it’s been sucking all of my irregular blog time.

This real estate stuff is pretty crazy. We hadn’t planned on moving until summer, because our ghetto landlord has us stuck in a lease until June, and the rat-bastard has no intention of letting us out early.

We met with a great realtor who was recommended to us by our favorite bar owner. I was a little worried about how we would get treated. I’ve had other friends who said that by the end their realtor was clearly just after a commission. When our bartender friend used this realtor to move to a bigger home, the house he was selling sold for literally 4 times our meager mortgage budget, so I was almost surprised the guy agreed to work with us after we told him our price range.

In November the realtor started sending us emails once a week with new listings just to get us acquainted with the market (Right after a delightful meeting with the bank that I’ll have to share later.) It was looking pretty bleak. There was virtually no way we were going to be able to afford anything even close to what we wanted. Then we saw these two condos in the same community that were 20-30k less than everything comparable in size. We wanted 3 bedroom 2.5 bath. We went and looked at these two condos, which were the same price even though one of was a little smaller and only had 1.5 bath. It did however have a finished basement. Whoever lived there had put in a lot of work on it. It was clean, had new kitchen laminate, new carpet, and not a single wall was eggshell. We couldn’t believe the price they were asking.

Then we looked at the other one. It was a complete dump. I’ve never even moved into an apartment that was ever as filthy as this place. The walls were all the original 1972 eggshell. They were dirty and marked up really bad. The kitchen floor was yellow, but you could tell by the marks around the refrigerator that it was supposed to be white. Instead of wiring the cable through the wall, someone had just drilled a quarter size hole in the ceiling to run the cable upstairs. It was a mess.

That’s when our realtor stepped up and talked a little sense into me. He pointed out that the nicer place just had a couple thousand dollars worth of cosmetic stuff done. It had a new kitchen floor, but the cabinets had just been painted. He eventually convinced us of two things. First, this place had everything we wanted, and second the sellers were asking too much.

We made an offer on the place that was $10k less than the average selling price for units in the area. We figured the worst they could say was no, which it turns out isn’t actually the worst thing. They didn’t even respond, which I think equates to “we got laughed at”.

No biggie. Remember, we didn’t really plan to move until June anyhow. So a couple weeks go by and that property finally drops off the listings in the area. We figured it had finally been sold. By this time the sellers had been moved out for over two months. They moved out of state to be pastor at a new church. The day after the posting disappeared, the property was re-listed with a different realty company, and a slightly lower price. Slightly meaning they came down $3k.

We met with our realtor again, who had by this time found out why these condo’s are so cheap. The park next door, and *some* of the condo buildings (not this one) are built on top of a very old landfill. We read the reports from the city and all kinds of inspector’s, and engineers, and health professionals, and we decided that the landfill isn’t a problem for us. We’re not planning to have kids, so I’m not worried about any radioactive little Sylow’s running around. Although, playing hide and seek with a radioactive kid could be a lot of fun...

Our realtor said he thought we should consider if we wanted to make another offer. I asked how much he thought we’d need to give them, considering their response to our last offer. He quickly replied with “I think we offered too much the first time.”

That’s right, our second offer was LESS than our original offer, and this time they didn’t laugh. In the end the appraisal came in at $8k more than what we paid for it. Our realtor kicks ass.