Bad timing

[Horace]

Second weekend of open houses starts today. Some googling indicates that open houses aren't that meaningful anymore, and are mostly useful for selling agents to gather potential clients amongst the buyers. But it feels good that we're doing something. Our agent is too busy with another client tomorrow to host our open house, so she'll be hosting today, and my wife will host tomorrow. We haven't gotten any offers, and I don't expect we'll get any offers while the market is mid-crash. I expect we'll be staying in this house for another several years. Hopefully the lights in the bay area will still be on, when the interest rates are settled and the housing market picks up.

[89th]

Good luck Horace! Make sure you take down your MAGA flags, btw

[Horace]

@89th said in Bad timing:

Good luck Horace! Make sure you take down your MAGA flags, btw

We’re gonna have an interesting discussion with our agent. She has a team that fixes up homes for staging and selling, which she covers in anticipation of getting paid with the sale. None of this is in writing. Now we’re going to find out how much that stuff costs. Our verbal agreement was that we would pay her back if we couldn’t sell, but nobody’s been keeping track of the costs.

[89th]

@Horace According to HGTV, that can be expensive.

[brenda]

@89th said in Bad timing:

Good luck Horace! Make sure you take down your MAGA flags, btw

LOLOLOL

[Horace]

Our agent told us today that a buyer's agent got in touch about an offer. One should be forthcoming. The buyer's agent is coming over tonight to take a picture of a spot of water damage on the garage ceiling. I was unsure what it was from, when the inspector was here, and he wild guessed it as roof leakage. Now that I care, I note that it's not under any section of roof. It's under the refrigerator on the floor above. The water supply flexible pipe probably leaked at some point. Hope it doesn't scare the buyer away. If we don't sell this time, we'll be painting over the water damage, which clearly hasn't re-occurred since I bought the place 12 years ago.

[Horace]

Still zero offers after 30 days on market. I can take a hint. We reduced our asking price by 5%. We think prices are going to continue to fall. I don't see how entire middle class neighborhoods can hover around 750k with these interest rates. There isn't room to grow. These homes are garbage investments. I had perfect timing, buying in 2010, and my home has only just over doubled since then. That's not so great for 12 years, with perfect timing. I doubt these CA neighborhoods will ever grow much again.

[Horace]

I'm starting to think more seriously about the possibility of renting this place out. The mortgage is in a good spot, with half of the payment going to principal, so it's a piggy bank. The rent would pay for that entirely, even after income taxes. The risk involved would be bad tenants, which landlords have little defense against in California. My selling agent has a property management company we could use to handle the rental, and according to her, about 50% of renters exit gracefully if asked, 25% will cost you two months rent, and 25% are worst case squatters. The other complicating factor is the tax exemption for home sale profits, which requires you to have lived in the home for 2 of the past 5 years. That would effectively impose a three year time limit on selling, after we move out. Otherwise the tax hit would lock us into renting it out permanently. I would be very motivated to sell it within three years. Lots of moving parts.

The other advantage to keeping the place is protection against job loss catastrophe. In the case of income loss, we could sell the TX place and move back to this easy mortgage.

[Copper]

@Horace As long as you can afford a squatter living there rent-free for a few years you should be ok.

[Mik]

I have seen my dad operate as a long-distance landlord. It's not pretty.

I may have forgotten, but why exactly do you want to move? I know it is not a have-to situation. I'm wondering if the benefits are worth the risks in an uncertain market, especially with the tech sector looking shaky.

[George K]

@Mik said in Bad timing:

have seen my dad operate as a long-distance landlord. It's not pretty.

I operated as a near-distance landlord for 3 years. It wasn't pretty either.

[Jolly]

Don't know what you guys are talking about. Being a landlord is the road to riches. At least that's what people trying to sell me property keep telling me.

[Horace]

@Mik said in Bad timing:

I have seen my dad operate as a long-distance landlord. It's not pretty.

Did he go through a property management company? I imagine it would be a nightmare otherwise. My agent's company charges 10% of rent and advises repairs will cost 5%. But they handle all the repair work.

I may have forgotten, but why exactly do you want to move? I know it is not a have-to situation. I'm wondering if the benefits are worth the risks in an uncertain market, especially with the tech sector looking shaky.

Just quality of life. It's a no brainer bad decision financially. But I'm 50 now and I would like to live somewhere I (we) really like.

[Mik]

I'm not sure if he did or not. Knowing my dad, probably not.

I can certainly understand that desire. My recommendation would be to rent a VRBO in a place where you are thinking about - maybe several places - for a couple weeks to see if living there is as nice as you imagine. You can work anywhere so it would be transparent to your employers.

[jon-nyc]

Ive always been afraid of the idea here due to such tenant-friendly laws.

Steve Miller did it a lot, in CA. You should pop over there and ask him.

One thing I remember he would do is get a reference from the prospective tenant’s second-to-last landlord. Current landlord might lie just to make the tenant your problem instead of his.

Of course he was a contractor and managed everything himself, which changes the economics.

[LuFins Dad]

25% Squatters? Fuck that…

[Horace]

Just got an offer at the new ask, with a deadline of 24 hours to accept. They could have made this offer while the ask was 5% higher.. it's not like we didn't expect to negotiate. But whatever. I don't think there's much in the way of competition at this price, or we'd have gotten some offer before. We have a showing coming up later this afternoon, I guess we'll wait to see if they want to compete. This price reduction appears to have worked. And the price still grabs most of the increases from the past couple years. Hopefully it's a solid offer.

[jon-nyc]

Nice! Good luck.

[Horace]

@jon-nyc said in Bad timing:

Nice! Good luck.

Thanks Jon. Lots could go wrong yet, but we'll be accepting this offer. It's from a person who saw the property a week ago. The agent couldn't figure out the lock box so I had to come and let them in. We were at the local park waiting for the showing to happen. I figure seeing how awesome the current owner is, was the clincher for them.

[George K]

@Horace said in Bad timing:

I figure seeing how awesome the current owner is, was the clincher for them.

That's our @Horace - humble as ever.

Hope it works out for you.

Do you have a place in Texas lined up? Will the timing work for getting out/getting in? Every time we moved, that was a major PITA.