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!

Selling My Apartment

I realized I never wrote in much detail about selling my apartment, and it's now been over a year since that happened!
As a refresher, I had owned the apartment for a couple of years when I met Sweetie. Once Sweetie came along, I gradually started to spend less and less time there, to the point where I was almost never home and kept a lot of things at Sweetie's place. This made me a bit sad, as buying my own home had been a milestone for me, financially and emotionally-- it felt great to have that independence. But as Sweetie and I gradually got to the point of being committed to each other and wanting to live together, it began to seem very indulgent to hang onto this extra apartment that I was basically using for storage. Yet I found it a bit difficult to take any action to change things until a situation fell into my lap-- a friend of a friend needed a place to stay temporarily. It started out as just being for a couple of months, which seemed like the perfect chance to test the waters and make a little money. It worked out well, and turned into a full year arrangement, and during that time, I didn't really miss having my own space. It was actually a relief not to have to visit it weekly to check on things. But being a landlord brought a few other headaches-- somehow having to repair the heat or the toilet seemed a bit more annoying when I was doing it for someone other than myself! Although I realized I could make a decent profit as a landlord, I decided to try to sell the place when my tenants told me they'd be moving out.

From doing some research about the market, things seemed pretty good. And I had actually already had an offer from an interested party, an investor who already owned another unit in the building. I emailed him to see if he was still interested, and he was-- until he couldn't get a mortgage. I figured it wasn't that surprising that banks might not want too many units in the building to be owned by an absentee landlord, so I didn't think too much of it, and took the next step, which was asking my Facebook friends if anyone wanted to buy an apartment!
I kind of knew the "for sale by owner" thing could bring some headaches, but it also seemed worth a try. I was sure that my apartment would sell for more than I'd paid, but I worried that a 6% fee might eat up a lot of the profit. So I was happy when I immediately had some interest from some college friends who I hadn't been in close touch with in recent years. I had all the worries you'd expect about mixing friendship and business, but it also seemed like the friendship was at arm's length enough that it wouldn't cause any big problems. There was a bit of negotiation, but we pretty quickly agreed to what seemed like a fair price, and got our lawyers talking.

And then... they couldn't get a mortgage either. This started to worry me a bit-- their finances were good but they weren't rolling in dough (or they wouldn't have wanted my apartment anyway!). It wasn't that they couldn't qualify for a mortgage, it was that there was an issue with the building. Because I'd changed my address on my taxes, I'd tipped the owner-occupancy rate under 50%, and in the climate of recent years with banks being so much more cautious after the financial crisis, this and a couple other quirks of the building seemed to make it challenging. It was a bit of a surprise, as some another unit in the building had just sold and those new buyers had managed to get a mortgage. But now that 2 potential buyers had bitten the dust, I decided it was time to get a broker involved....

Stay tuned for part 2 of this post later this week!

Happy New Year!

My, it's been a while, but I have been a busy girl and have lots to tell. I haven't wrapped up all my final numbers yet but I will give you a spoiler: my net worth is now over $900,000. I am wondering if I dare make my 2014 year-end goal the big One Million! Yikes. 

My income and spending haven't changed too drastically, or at least I don't think so. I was thinking about guessing which categories would be up or down, and predicted that my lunch spending would be up, just because I FEEL like I have been spending more on lunch... But a quick peek at Quicken told me I was wrong. So who knows what other surprises I will find. 

I need to spend more time analyzing those numbers, as there has been one major income/expense change that I have to account for-- I sold my apartment!

Yep, my tenants moved out and after doing a little research on the state of the real estate market, I decided to test the waters. The waters turned out to be steaming hot: I had multiple offers within days and ended up with a very quick sale  to an all-cash buyer for a little more than my asking price. Though of course there were a few more wrinkles to the story that made it somewhat more complicated! I will share the drama soon. 

The sale leaves me with some interesting decisions to make in the coming year-- how will I invest this cash? Sweetie may factor into this, in terms of some sort of joint property ownership. Oh, and Sweetie's unemployed now, just to toss in another financial bombshell. 

So stay tuned (those of you who are patient and loyal enough to still be tuned!) to see what 2014 will bring. 

Sell or Rent?

It looks like my tenants may be leaving in a few months, which means I have some decisions to make. Should I try to find new tenants and rent the place again? If so, should I rent it furnished again, or clear out my stuff? Should I sell my furniture or put it in storage? The same question would apply if I decide to put my apartment on the market for sale. The real estate vibe has been fairly positive lately, so I could be catching a good moment-- who knows when things might crash again! Should I use a real estate agent or try a for-sale-by-owner?  And if I did sell, how would I invest the proceeds? That would really change the balance of my overall net worth portfolio and putting it all into mutual funds could make me a lot more vulnerable to market swings. 

Time to put on my thinking cap... All suggestions are welcome!