Recently I was visited by a friend, Rick D. He lives in New York State, and I hadn’t seen him in some time. After catching up on each other’s lives he asked about our real estate market. I told him well-priced homes now sell between 60 and 90 days and prices have held up well. Rick then told me his story.
“Two and a half years ago my wife and I decided to sell our 2-storey home and purchase a one-floor-plan. Julie was fixated on Riser Estates, a somewhat upscale, desirable neighbourhood. Within a month a sprawling ranch came on the market that Julie fell in love with, and almost large enough to accommodate our four children. With only 3 bedrooms, our two oldest, now 8 and 10, were thrilled to hear that we’d add a rec. room, two bedrooms and full bath in the unfinished basement.
“So I bought and closed on the vacant home to complete the work before moving in. We then listed our 2-storey which luckily sold within forty-five days. By the time our sale closed we had moved into our new residence. Than two weeks into our new home the crying and complaining started.
The neighbourhood had no other children and our neighbours--all empty nesters and mostly retired--were quite intolerant of our offspring. Jodie got scolded for retrieving a ball from a neighbour’s yard, and I was rudely confronted when a friend used someone else’s driveway to turn his car around. To say we weren’t welcome was an understatement.
“Within three months we listed the home, bought another two-storey and moved back to our old neighbourhood. Six months after having moved out, the ranch sat there unsold. As a friend was interested in renting it, we agreed to take the home off the market. The money helped with the carrying costs. Six months later the tenants moved out. It’s been back on the market for months and the cost of carrying two homes is really hurting.”
I asked about the home’s price. “We listed at the agent’s suggested price,” Rick said, “and we’ve dropped twice since. We’re now some $10,000 below what we invested; including the cost of finishing the basement. We have now listed with another agent and she suggests dropping the price another $10,000. What’s more, I think the house we are in is more saleable. What do you think? Should we put both houses on the market and see which one sells first?”
“You could do that,” I said. “But get a realistic evaluation on the home you’re in first. As you purchased it recently, you may not recover your investment after costs. Still, by moving back to the ranch, you’ll likely mitigate the losses you’re seeing there.
“You and the family, however, will have to endure the surly neighbours and the repeated discontent until your market turns around, maybe in a couple of years. You’ve uprooted your family twice in a short period and are now in a happier place. So shouldn’t the family discuss and come to some agreement about the realities before relocating back to the ranch?
“Then again, you may be better off to lower the price again, take the hit, enjoy harmony in the family and still cut your monthly carrying costs in half. Only you can determine if it’s worth it emotionally.”
Was it good advice? I hope so. I’m just thankful to be a homeowner in Canada today.