Wednesday, February 11, 2015

Selling My Apartment, Part 2

I found a very nice broker and we were immediately in agreement about the listing price for my apartment. It was more than what I'd agreed to with my friends, and left me some room to negotiate down a bit and pay a 6% fee and still come out with close to the same net. The broker took lovely photos, did a couple of open houses, and the offers rolled in, fast! I forget the sequence of all the various offers playing out-- we juggled around the various pros and cons of a few for several days-- there were some investors who offered a little low and didn't want to come up to match higher offers. There was an offer above asking price but we were worried we'd have trouble with the bank's appraisal coming in too low later. I ended up accepting an offer at asking price where the sellers said they'd waive the mortgage contingency. This could have been a good thing, as they had plenty of cash, but they did want to finance the purchase, and before the contract was ever signed, they backed out because, guess what, they couldn't get a mortgage! But meanwhile, another offer had come in for asking price, from an all cash buyer. My excellent and slightly sneaky broker told them there was a contract about to be signed, but that I'd back out of the other deal if they upped their offer to $5k over ask-- and they did, with the only contingency being that they wanted to close fast. That was fine with me, so finally, after several failed attempts, the deal was done. A few weeks later, I walked out of my lawyer's office after the closing with several checks totaling over $180k-- my equity after paying off my outstanding mortgage balance plus a nice profit.

The whole experience happened quite quickly, so I never really got to the point of panicking too much about the failed transactions. But it did leave me feeling profoundly relieved after the sale was done-- not only had my apartment become a financial and logistical burden because I wasn't really using it, it had also become a source of stress as I realized there were some maintenance issues in the building that I hadn't really noticed, and if not actual irregularities, the potential for some irregularities in how the building was being managed. The buyer's inspector found a little mold in the basement, but otherwise seemed to think the building was in decent enough shape physically, which I was happy about, as I'd had my issues with leaks at the very beginning and worried there could be other problems. So I was glad to be done with it by the time I moved out.

A couple other observations: I tried to sell most of my furniture, without much success-- people on Craigslist can be really flaky! I ended up giving a lot of stuff away to friends' children, either in or just out of college-- in exchange I got a nice bottle of wine and a lot of goodwill and appreciation, which was fine with me! I also found it very difficult to donate stuff-- only one charity who offered pickups even bothered to return my call, and when they got my voicemail that one time, they never called back again or answered any of my calls or emails. I ended up paying Junkluggers to haul away lots of stuff and donate it (they provided a receipt so I could deduct the value on my tax return).

I was also somewhat surprised that many of my potential buyers were parents buying apartments for their children. I mean, I know this must happen a lot in NYC, but it was still kind of annoying to have  the reality of it in my face. I guess I thought of my apartment as being the kind of place that was accessible to a middle-class first time home buyer, a young couple or a single person like me-- it was small, a bit further out in Brooklyn than a lot of people wanted to live, and just not somewhere I would have pictured a rich kid living. But I guess it's just a sign of how things have been changing in NYC in general that even my not-that-fabulous neighborhood is all that relatively wealthy people can afford-- the super-rich are pushing the merely affluent into neighborhoods that used to be more middle-class, and everyone feels the effects.

But I'm out of that game now-- for the moment, I'm a renter, as I pay Sweetie each month to cover my share of our bills. At some point, we may make some arrangements so that I'll actually have a mortgage in my name again... but that is a story for another post!


frugal zeitgeist said...

Great job; looks like you had some significant appreciation. If your building has costly maintenance issues looming, this is the right time to decamp.

I just executed my contract of sale today with an all-cash buyer who bought my apartment for a child in grad school. We close in two weeks. Every single person who was seriously interested in my apartment was a cash buyer looking to buy for an adult child. My parents helped me with the down payment for my first apartment, but parents paying all cash for a child's home is absolutely not my reality. That said, it is so hard for middle-income first-time buyers to get a toehold in the New York market at this point that I'm not terribly surprised that this is becoming a significant segment of the buying market.

I closed on a bigger place with much more light and better appreciation potential in mid-December and have been paying a whopping mortgage and double expenses for the past month and a half. I said I'd never have a mortgage again, but my interest rate is so low that it didn't make sense to liquidate stock investments to pay all cash.

Once I close on my sale, I'll lop off a big chunk of the mortgage and get it down to a manageable level. If I had to pay the remainder of mortgage off immediately, I could do it without tapping my retirement. That gives me tremendous peace of mind.

Best of luck as you move forward, and congratulations.

Kate said...

Sounds like you did well! These are good times to cash out. It was interesting to read as I own in Brooklyn, and I just feel lucky we got in a few years ago, as I don't think we could afford our apartment now. For the record, we're in one of the more expensive neighbourhoods in Brooklyn, but we're talking about two professionals and a 1-bed apartment. Crazy.

Anonymous said...

Please Frugal Zeitgeist and My Open Walletperson write more! I miss both of your writings as you both live in NYC as I do and I relate to everything you write about.

I'm a rent-stabilized person who will probably never be able to afford a down payment. It's beyond frustrating!

Thanks for writing!