Living In Less:Smaller home = Larger life

Nearly ten years ago, I had a conversation about money with a good friend of mine, Ann.  Wiser than me in many ways, she told me that when she and her husband bought their house, they took out a 15-year mortgage and bought a house smaller than what they could afford so they could pay it off faster.  I distinctly remember this conversation because I gave her a hard time about it. I didn’t understand how someone would actually choose to live in a smaller, less expensive house if the bank was ready to give them the money!

I was in full consumption mode at the time, enjoying “easy” money as a full-time employee and never seeing the end of the hamster wheel I had just jumped in.  Earn just enough money to spend it all on housing I couldn’t really afford and then keep doing it again and again, never saving enough to be able to make a difference.  I was trapped by a job because I needed the income to pay for the house.

Then, I read books like The Total Money Makeover, The Millionaire Next Door, Rich Dad/Poor Dad, the Automatic Millionaire, and many others.  I re-thought the life I was building and eventually, I created a plan to downsize my current living space so I could live my life on my own terms, save more money and be able to live comfortably.

Just recently, I put my house on the market and moved to a house with 500 less square feet in a less expensive town.  Essentially, I lost a bedroom (that my three dogs shared!), a first-floor laundry room and some square footage via smaller rooms.  Although I lost some space, there are many advantages to this downsize:

Moo-ney Well Spent – The Farmer’s Cow

My husband and I took our daughter last week out to get pumpkins.  We stumbled across Mapleleaf Farm in Hebron, lured in by the hundreds of pumpkins on the lawn.  After we picked out our pumpkins and paid, we were drawn deeper into the property by sounds of cows and goats.

My daughter is 18 months old and loves animals.  She’d have to – with a house packed with three large dogs and a dog at each of her grandparents.  Still young, she doesn’t distinguish between dogs and any other animals.  So, when she saw a goat for the first time, she patted it on the head and said “nice puppy.”  Too cute.

FREE MLS Listing! Or is it?

I recently came across a young couple looking to sell their home and they want to save as much money on the sale of their house as possible.  Who doesn’t?  The first place they looked was to try to sell their home themselves and save on agent commissions.  They elected to post their house on a website called Iggyshouse.com which claims to give you a free listing in the Multiple Listing Service (MLS), post you on Realtor.com for free and advertise your house for sale on their site.  More about Iggyshouse.com later.

I can’t blame them.  I sold my first house by myself and nothing catastrophic happened.  But I’ve learned alot since then.  I learned that I perhaps sold my home for too little, hearing that FSBOs average a price 15% below the average.  I’ve also learned that most FSBO sellers eventually give in and hire an agent to sell their house. 

The reason why most FSBO sales take longer and the houses sell for less is because FSBO properties do not get listed in the Multiple Listing Service.  The MLS is the MOST POWERFUL tool to sell your home.  Forget about Realtor.com, most homes are sold to buyers who are working with a real estate agent who found the property in the MLS. 

The Anatomy of Failed Low-ball Offer

I recently put my house on the market.  This experience has given me a little perspective on the real estate market – and in particular the “low-ball offer.” As a buyers agent, I’ve only been on the delivering side of a low-ball offer, not the receiving end.  As the owner and agent for this house, I can now say what has worked for me and what definitely did not work for an agent who recently presented me with a low-ball offer.

My House

I am realistic about the value of my house and the market (so we all say).  Had I sold my house 6-8 months ago, I could have asked $10,000 more.  However the time of year and market conditions required an aggressive price so I swallowed my pride and listed it for less than I really wanted to.  I also knew that I wanted it to sell fast so I spruced it up: power-washing, painting, refinishing wood floors, staging and cleaning.   Priced right and in great condition, I felt the house would sell quickly. 

Enter the first offer – the low-ball.  The agent, Agent X, presented me with an offer for $40,000 less than the list price.  I admit that I was shocked, annoyed and nervous.  Maybe I misjudged the value and he market?  Ultimately, I was confident in the quality of the listing and did not select the offer for several reasons, some of which I’ll go into below.  The house is now under deposit for very close to the asking price.  Here’s why the offer didn’t make it – maybe it can help some of you.

How To Doom The Low-ball Offer

• Send an incomplete offer.The offer was delivered to me without a valid pre-approval letter.  Without every piece of information, how is a seller supposed to make a decision?  While the buyer was getting the letter updated, other offers came in.

Change is Good

I am thrilled to announce that after a great deal of thought, I have changed brokerage firms and am now a proud RE/MAX agent.  If you’ve read my blog for any time, you know that I have been a true blue exclusive buyer agent – only ever representing real estate buyers. 

Although my commitment to representing buyers hasn’t wavered, my belief that exclusive buyer agents best represent the needs of buyer clients has.  (I will write about this in more detail) In addition, I made a crucial business decision that in order for me to improve the service I give to my clients, I needed to learn from the best and I needed more support.

Serendipitously, a trusted friend mentioned to me that a very successful RE/MAX agent was looking to grow her business by adding team members.  I met with Leslie Bajorski of RE/MAX Precision in Newington and after some getting to know each other, I officially joined The Bajorski Team.

I had taken some time off from blogging to get my head straight and now I’m back.  You’ll notice some changes to my blog but I still remain committed to giving home buyers, sellers and homeowners straight talk, honest advice and a little humor about real estate. 

Thanks for reading!