Real Estate Update

Many, many real estate dreams have been dashed in the past two weeks.  First the renovation was taken off the list as an option.  Now we've met with a realtor - insert wah, wah, waaaaah.

Last Saturday we had one of the more prominent real estate agents in our area visit the house to gather more information.  She was immediately pleased with our front bay window as most in the neighborhood don't have this.  She loved the kitchen, although the hardwood floors could use a little TLC.  The good thing is that she recommended a hardwood deep cleaner that might keep us from having to refinish the floors.  The sun porch and finished basement were super traits of our house as well.  She also liked that our house was not cluttered.  The purging done during Christmas break pays off :)

Then she walked down to the bedrooms.  Our house was built as a three bedroom ranch, but sometime before we moved in the owner knocked down the wall between our two front bedrooms.  We've reaped the benefits of a large bedroom.  She started off by saying that the spaciousness of our bedroom was great, but then her smile immediately left her face.  "You know, I'd have to market this house as a two-bedroom house," she lamented.  We had a sneaky feeling that this would be the case.  After the tour of our house we sat at the table to talk comparables  and nitty-gritty numbers.

The comps in our neighborhood are right around what we paid for the house.  Some comps clearly need a little help to make the house a bit more modern - pink carpets and macrame plant holders scream "my owner is older than 65," while others are similar in style to ours.  Then the talk turned to what we price would sell this house.  The sad thing is that our two-bedroom house would have to list for approximately $40,000 less than if we had a three-bedroom house.  Yikes!  The Realtor said that we've got to think about what is best for our family, but we should seriously think about returning the house back to a three bedroom.  While the addition of a third bedroom will increase the amount we can sell our home, we won't really make any money on it.  This is is a problem because we need money to then buy a new house.

We also talked about the foreclosure market in our area.  Apparently there are many homes in the surrounding suburbs that go on the market in the Spring.  That does not bode well for our house value. 

Just like the renovation option, we have more information so we can make a smart decision.  The game plan for now is to talk to contractors for bids on putting the wall up.  We hope this is not a huge expense since we really need to get a return on our investment. 

Who knows maybe we'll be happy with three bedrooms.  After all this a move may not be in the cards.

More to come...

Cross one off the list

Since my last post the move or renovate debate has continued.  The holidays put a big slow down on the decision since we weren't going to spend the money then.  Now that the doldrums of winter are upon us, we're ready to get talking again.

Remember it took us 5 years to find a bedroom set we liked.  This is a house we're talking about, so I think we are moving at lighting speed.

Matt called the bank yesterday to talk about construction loans.  What steps are necessary in obtaining a construction loan?  He summarized that it was a chicken and egg situation.  You need specific architectural plans drawn up that the bank will use to create an appraisal of the final product.  That appraisal determines your loan amount.  The bank would give us 70% of the appraisal value.  That sounds all well and good, except that we still have a mortgage to subtract from the 70%.  The caveat becomes that we could spend the money with an architect to draw up the plans, but the bank might not give us the money we need to fulfill those plans.  That's a lot of money for a carrot on a stick that we'll never get.

Now that we know a renovation is off the table we are left with move option.  I suppose that's a good idea since we loathe our neighbors and don't need their grossness bringing down our home value.

Should we move within our current neighborhood?  That would keep M at her school and with her friends.

Should we move within our current city?  We love our community and have put down roots with the park district and library.

Should we move to another state?  We could find a house that is bigger than our current one for less money that might give me the opportunity to try my hand at the stay-at-home-mom gig.  Matt just needs airport proximity to do his job.

We are talking with a Realtor this weekend.  She will show us some area comparables to see what we could possibly get for our house.  We are also interested in what she says we should fix/improve upon before it's market ready.

One item ticked from the list three more to go.  Keep you posted!