Why We Accepted a Low Offer On Our House

by Kevin on March 14, 2011

Over the last several months I’ve been documenting the up and down experience of leaving our first home behind, moving to a city closer to our families, paying for two places to live, and trying to sell our home from afar. (A few articles: How We’re Maintaining Two Residences Without Going Broke27 Additional Things We Learn Trying to Sell Our Home)

Well today I have some exciting news that I’ve been sitting on for a while: we’ve accepted an offer on our house.

Now before you get out all the party balloons, just like the title says, it was a low offer. As in low enough to be really close to our uncomfortable range. But we took it and I thought I would share our reasoning on why today.

You can hold off on the second round of party balloons because we haven’t closed  yet. (Although we did pass inspection and that’s why I’m feeling more comfortable in sharing the news.)

So why take a low offer? Read on.

Selling a Home for Cash Flow

This first significant reason for taking the offer is purely for cash flow reasons. I’m working a full time job, I do blogging and other freelancing online, my wife is working two part-time jobs, and we have a rented townhouse we’re living in and the mortgage on our house. Thankfully we are blessed to be able to keep our budget out of the red with the four jobs we work hard at. But selling today means that by the end of this month we’ll be freeing up a massive amount of cash flow — in fact, it’s more than my wife is making combined at both of her jobs!

Avoiding Utilities, Maintenance, and Stress

In addition to not having to pay our mortgage we also get to cut out utilities and maintenance on our old home from the budget. This is another fairly significant cut out of the budget. I don’t have to have a coworker mow the yard. I don’t have to pay for electricity and water service in an empty house. It feels good to cut those things out of the budget.

I also mentioned last month that we had to purchase vacant home insurance. By selling today we limit the amount of time the house is left sitting empty and essentially unguarded. Here’s to hoping nothing happens between now and closing!

Some might argue we should have tried to rent it. That was definitely still on the table, but let’s be honest: how many people do you know have successfully (meaning positive cash flow) rented their home from over 6 hours away? Even if we had good tenants it leaves the house hanging over your head… hoping the economy improves enough for someone to want to buy it. That’s a lot of stress.

Low Offer Now versus Lower Offer Later

Finally it’s the simple case of a bird in the hand versus two in the bush. Except the two in the bush (waiting for a better offer to come along) is costing me money.

It’s the first offer we’ve had in over 4 months. We had a lot of people look at our house (because we staged it well), but no offers. Everyone is looking for jaw-dropping deals right now — and I don’t blame them. I would do the same thing if I were in their shoes. But at least in our area this has meant a bunch of homes are sitting on the market because buyers are on the sidelines looking for someone to get desperate to sell.

Let’s say we didn’t take the current offer. Now let’s say we wait another 8 months and then receive an identical offer. We’d be much better off by accepting today. If we had been on the market another 8 months (so roughly a year) you can bet the offers we would get would be even lower than the one we accepted. All the while during those 8 months we’re paying the mortgage, taxes, insurance, utilities, and maintenance on the home. And it’s at risk of vandalism and fire because it’s empty.

Closing the Chapter

I’m not saying it’s pretty. I’m not saying I’m thrilled with it.

But it’s almost over and we’re lucky enough to be walking away with some of the money we put into the home. That’s more than a lot of people can say. We can close that chapter of our lives and move on with a renewed focus on putting down deep roots in our new city: Knoxville. Roots that won’t be burdened with the stress of maintaining a residence over 6 hours away.

Your thoughts? Are we fools, lucky, or to be pitied? Let’s hear it in the comments.

{ 2 comments }

Rachel Fischer March 14, 2011 at 6:37 am

Not fools at all. I have two neighbors, both you lost substantial amounts on their homes because the early “low” offer was too low for them. One ended up selling for 60k LESS than the low offer, and the other had their house on the market for 2+ years, finally short selling for over $50k less than their low offer.

Golfing Girl March 18, 2011 at 5:26 pm

After putting a ton of work into our house, only to move one year later, we didn’t get an offer for 1 1/2 years because our first realtor priced it way too high and we took all the furniture with us so it screamed desperation and people with no imagination wouldn’t be interested. We accepted $2K less than what we paid for it 2.5 years before. We were thrilled to be rid of a 3rd mortgage payment (had a first and 2nd on the new house and a newborn baby). We had to bring a few thousand dollars to the closing to cover the realtor fees. But we were able to knock out the 2nd motgage in no time with that $1100 payment gone.

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