House Story Finale

I won't bury the lede, we sold the house!

If you’ve been following along for a while, you will remember that two years ago, in January 2023, we bought a proper family home and moved out of our adorable starter home. At the time, I couldn’t imagine trying to fix up and sell a house while two little kids were living in it. So, I took a HELOC and a 401k loan and bought the new house with every intention of selling the old house post haste.

I caught some flack for sharing my use of a 401k loan, which is apparently the third rail of financial planning ‘No No’s. I still have no regrets.

I never imagined selling the old house would take two years! A perfect storm of challenges occurred when we finally listed it for sale in the summer of ‘23. Mortgage rates spiked from historic lows < 3% to 7% for 30-year fixed loans. Rates still have not come down. The homeowner’s insurance market went through a period of reinsurance stress and repricing of climate risks, causing our policy price to double. We couldn’t see house prices moving in a market with low volume and few comparisons. Buyers in this price range use financing and don’t have unlimited income to absorb these cost increases. The market basically froze.

After rejecting several lowball offers, we took the house off the market to make some updates. Our mistake was trying to do these ourselves, embarking on a never-ending home renovation project. Then, one day in late October, I took a few days off to help my husband complete some work. In the driveway, I waved to our old neighbor, who chatted me up.

I commented that we were trying to finish our projects so that we could relist the house soon, probably at a lower price than the previous year. He mentioned that his mother plans to sell her house in Texas and move to New Orleans. She might be interested in buying it. “Perfect!” I said. Let’s chat.” We agreed on a price and signed a contract a few weeks later.

We closed on the property last week. It feels great, but I won’t know how it really feels until March 1, when I don’t have two mortgages and a HELOC payment to make. Or in a few more weeks when we receive the balance of our Escrow account and a refund from the homeowner’s insurance policy. Hey! At least I know exactly how much of a second home I can afford if I want to buy one….. I don’t.

While I have zero regrets about buying my dream home, I have a few tidbits of advice for anyone looking to upgrade to a larger, more expensive home.

1. Expect the Unexpected - Don’t assume the housing market will always be a seller’s market or that prices will never come down. You never know what your house is worth until you try to sell it. Listing prices of homes around you may be very different than the eventual sales price. Other shenanigans can hide the actual sale prices - such as seller concessions.

2. Skip the Starter Home - If you can, wait until you can afford the home you want in the long run. While the idea of a starter home is enticing, you might be better off renting and saving for a few more years. Our earnings didn’t align with this plan. I’m a bit salty that my timing did not align with historically low mortgage rates. C’est la vie.

3. Leave a Huge Margin for Error - When we decided to buy the new house without selling the old house first, I assumed the worst-case scenario would be that the sale would take a full year. It took two years. The plan was to use the remaining HELOC balance if cash ran short. Luckily, the business grew, and so did my income. Things could quickly have gone the other way. I took a risk and bet on the potential of my career, and it paid off. I am fully aware that luck was a contributing factor in this case.

4. Budget for Maintenance / Repairs - A bigger house requires a bigger maintenance budget. The first year in a new house can be financially tight. Leave room in your budget for all the little things that can go wrong and must be fixed. We asked the seller of our new home to purchase a home warranty on the appliances for the first year. We replaced a refrigerator and had several repairs on the warranty. We chose to defer several other maintenance projects while we waited for the other house to sell.

5. Give Yourself a Break: The mental stress of the two-house conundrum was honestly worse than the financial stress. It reminded me of the times I carried credit card debt in my early twenties. I found myself thinking about all the dollars going towards the other house that could have been saved or spent on other things. I had to remind myself that life is not an optimized spreadsheet. Life is messy, organic, and human. That’s what makes it so sweet.

In the end, we accomplished our long-term objective. We own a home where we can comfortably raise our family. It is a fabulous space to host and entertain. We hosted 12+ people for Thanksgiving and again for Christmas Eve. We have big plans to improve the space over time. Perhaps a pool is in our future. I’ll be back with lessons learned about installing a swimming pool, if and when that happens.