Navigating the Storm

This has not been an easy process.  The amount of time I have spent this week on damage control has been overwhelming and expensive.  The buyer backing out 18 days before the duel close almost screwed the entire deal and cost us thousands in extra fees.  I have a background in accounting and spent a lot of time around construction so this has been my saving grace.  Here are the highpoints:

NVR & Clearview

NVR has really stepped up and worked with me.  They seem to have more influence over the closing schedule than Ryan Homes.  While Ryan Homes sets the closing date based on when construction is complete, NVR sets the closing based on when the financial documents can be completed.  I have a feeling if you want to push back a closing date, just slow down the stream of information to NVR and back goes the closing date.  Clearview has been awesome so far. I only need a little bit of equity from my house to make the entire deal work.  They are going to refinance my current home into a home equity line of credit so I can tap a little bit of equity.  This is so much better than doing a 401k loan or distribution or cleaning out our savings account.

So far my proposal is holding together and everyone so far sees no problem with the structure.  Having two mortgage payments pushes me right up to the 45% limit of the back end debt to revenue ratio.  The back up plan is adding my fiancé but our rates would change drastically but then we would clear the debt to revenue ratio with no problem.  Our current plan allows us to pay down the home equity on the Landon when we get the full equity from the current home sale.  Then our interest and payments snap into our financial plan and all is well.

It’s going to suck but this is the best financially sound solution.

Tip & Trick – I’ll share a little trick you can do to help you with getting through a tight spot like this.  Since most Ryan Homes are rather expensive, many of us are going to have bigger than normal tax refunds due to the higher mortgage interest expense and real estate taxes.  Let’s say this year I project out my tax refund to be 6,000 from tax deductible interest and taxes.  Each pay cycle my tax is taken out and given back to me at the end of the year.  If I change my W4 and add more allowances(Dependents) you can have more take home pay and pay less taxes.  So a 6,000 a year tax refund could result in 250 more per pay for a bi-monthly person.

Current Home

We have our current home back on the market with the old multilist.  It’s now past being on the market for 3 months and I feel the ad is stale.  My agent and I discussed this, and she’s going to come take new pictures and relist the house and start all over.  Hopefully this will generate more online attention for it.

Tips & Tricks – I have figured out a lot of things on selling a house.  We have tons of web activity back prior to the sale.  Here are some good suggestions.  1) Push for an open house as they include your house in a ton of additional advertising.  Open houses are moved higher in the list on Realtor.com and Zillow not to mention the Broker advertises them in the paper.  2) Make sure you push your agent to make Zillow’s square foot the actual.  In my case, Zillow used the county assessment’s square footage which is lower than actual.  My house has a finish basement, utility room and basement bathroom that all add to the living space not included in the county.   How this affects you is that many buyers use Zillow’s average price per square foot to compare the price of your home to that of others in your area.  While Zillow is not consistent and much of the data is wrong, buyer seem to be basing price on this more than comparable homes in your area.  Here is what this looks like in a comparison:

	County	Actual	Offers
Square Foot Used	1,022	1,228	1,022
Price	169,900	169,900	160,000
$ per Sqr	166	138	157
Zillow Ave	154	154	154
Over/(Under) Per Sqr	12	(16)	3
Over/(Under) Per Total	12,512	(19,212)	2,612

If your square footage is wrong (most county data is understated) you could be screwing yourself out of thousands.  Once my agent finally changed the square footage to actual you can see my house is nearly 20k less than average homes in the area.  I confirmed that the square footage should be external dimensions less garage space and unfinished space.  Ryan Homes confirmed it for me along with other realtors I use at work.  I should have fired my agent over this when she argued with me 2 months ago.

This weekend we try and address so more home repairs.  While my architect says the deck is not going to fall off the house, he did tell us some repairs would firm it up and remove any concern from a future buyer.  Saturday we install 11 5inch lag bolts into the ledger board and into the foundation.  We’ll basically be tripling the structural strength of the current bolts holding the ledger board onto the house.  I also plan on nearly doubling the current joists.  While on average the joists are one every 21 inches, we’ll add more so that it is one every 14 inches.  I’ll also add metal right angle which will really stiffen up the deck.  An HVAC contractor helped me with the suspected Asbestos external exhaust pipe.  It will be encapsulated this weekend.  I have already chiseled off the old brick added to the top of the chimney.  We’ll build a form and add a concrete top cap to the fireplace chimney.  I also added fire foam to the wood burner steel liner and clay sleeve.  I also have a contractor coming Saturday to spray for pests even though I have not seen a carpenter ant or termite in my basement in 3 years.

Hopefully these repairs will be the last needed to get our house sold.

My readers

I never thought anyone would spend a lot of time reading what I have shared.  I appreciate the blog of others who have built and I learned to ask for things like an extra switch at the front door for the external garage door light.  Seldom do Ryan Homes blogs write about the rest of the process.  Building a Ryan Home wasn’t just about building a home, but it includes a lot of extra things like financing and selling the current home.  I wanted to share all of the experience good and bad.  Sometimes I am embarrassed to share that our deal nearly fell apart and how crappy selling has been.  I was touched by how many readers wrote to me.  Thanks to everyone who wrote me.

The Landon

Last night we went up to see the Landon.  It’s been over a week for us and seeing it was much needed.  It’s beautiful and helps remind me why we are doing this.  I can just see the joy of my partner’s face as she walks through the house studying it, planning how to decorate it in her head, creating a home we both will love.  The only regret I have is that I hired Caldwell Banker and couldn’t sell our house first.  I really wanted to have it sold so I could help my fiancé by the Amish country table she fell in love with.  We still hope it will sell before the end of the year.

Our garage door was locked and we were afraid that they locked us out.  Ironically, the front door was unlocked and we were able to get in.  There was a lot done since this past weekend.  The stone was on the house except for a few spots.  The moved the AC compressor location to the small yard side of the house.  The turned the power on and installed all the lights.  Guardian installed internal speakers and switches(still never moved the external speaker).  The vinyl floor was installed and the tile was put into the bathroom.  The appliances were delivered and put into the garage.  It doesn’t look like they have much more to do and should easily be done by the first week of November.

Here are the pictures: