The One That Thankfully Got Away

This is a story that goes back to when we were house hunting.  It got brought to light because, as you’ll see if you read on, it’s a very small world!

The backstory. In 2007, before my wife and I got married, we knew that we wanted to buy a home to start our marriage and eventually raise our family.  The condo that I’d previously held was nice enough but it wasn’t ideal for family living.

The housing market had already started to trend downward, at least here in Michigan.  Prices had already slipped on average 10-15%. At the time, I foolishly thought that they had neared or hit bottom, not knowing that the worst was yet to come.

As an aside, I sold my condo in just the nick of time.  I sold it for roughly $125,000 and it sold last year (through foreclosure) for $50,000.  No other property in this story lost anywhere near that percentage of its value.

I put up the condo for sale, and it sat around not doing much of anything, which was frustrating.  A couple of people came through here and there, but the lack of traffic was maddening.  The realtor assured me that’s just how it was.  So, imagine my surprise when one showing turned into an offer, one that was actually pretty good and that we accepted.

This meant that we needed to find a home.  And fast!  We knew that the possibility was there that we might need to look for a house, but the way things were moving so slowly, we hadn’t put that much effort into it.  We didn’t want to get into a situation where we spent a lot of time finding a house we liked, only to have it not be there if the condo took a long time to sell.

Once we received and accepted the offer on the condo, we kicked it into overdrive.  We knew the area where we wanted to be, taking into consideration proximity to our families, school districts, property taxes, the reputation of the city, and such.

We looked at dozens of homes, but really had it narrowed down to three particular houses:

  1. The house that we bought and live in today
  2. Another house that we would have likely moved into had our current house not worked out, but I know we wouldn’t have been happy with.
  3. The one that got away.

This is the story about house number three, the one that got away.

In the midst of going through all of the houses that fit various things we were looking for, we somehow came across a ‘For Sale By Owner’ (FSBO) house.  It’s been five and a half years, so I honestly cannot even remember how it came to pass.  I’m thinking that maybe our realtor had given us information about another house in the neighborhood and we happened to see the FSBO sign, but I really don’t remember.

In any case, from the outside, the house looked great, so we took it upon ourselves to call the number and arranged for a showing.  What we saw, we really liked.

The pros: The house was very well kept up, it had large bedrooms, it had a new roof, and had many decorating features that were current and up to date.

The cons: It was a three bedroom ranch.  Ideally, we wanted four bedrooms, but we liked the layout of this house and thought we could make it work.  The other con: price.

Our ‘cap’ on a house was $275,000.  That assumed that we would have to put some renovations into the house, since many of the homes we saw would need some sort of work, whether that be a new roof, new carpet, or something else that would likely add at least $10,000 to the purchase price of anything that we bought.

I had this limit in place also assuming the price per square foot that we’d likely be paying.  This number was assuming we would have bought a house around 2,200 square feet or so.

The house we were looking at was a ranch, and at 1,850 square foot, was big for a ranch, but still smaller square foot wise than many of the other homes we were looking at.

The price and offer.  At $299,000, the house was priced at a much higher per square-foot level than any other home we had seen.  Now, the house was in great shape and would need no renovations after we moved in, so that $10,000 cost I’d been anticipating would not be in play, but it was still way higher nonetheless.

We decided that we liked the home and wanted to make an offer, so we contacted the owner via e-mail and offered $251,900.  We thought this was a fair offer based on the square footage, comparable sales in the area, plus we knew that by selling it themselves, they would be keeping a good portion of the money that would otherwise go to a realtor.

Their response.   She reviewed the offer and explained that they had paid $270,000 several years before (which I already knew due to public record), and also explained that by having put in many of the improvements (roof, carpet), that they would be selling it for a loss at anything less than $285,000.  She then indicated that was their final offer.

I had been working with our realtor, who although he stood to make nothing on this since it would be handled privately, was still gracious enough to offer his opinion.  He agreed that the price we were offering was fair, and that even their counter-offer was over-priced.  He also knew how the real estate market was going and did not think the house would hold it’s value.

Still, we countered with one last offer of $259,900.  She sent a message thanking me but declining the offer.  With no further counter (plus knowing that the counter was our absolute highest price on that house), we knew we were done.

By the time this came to a conclusion, we had already found the house that we live in today.  We attempted to play the fact that were looking at this other house as leverage to accept the private sellers offer, but it didn’t really work, largely because she held a belief that her house was ‘better’ and ‘worth’ the difference.

The aftermath. We actually paid more for the house we’re in, but at 2,300 square feet, it was competitively priced from a per square-foot level, plus it also fell into the ‘not needing any work’ category.  So, it was worth it, and now that we have our family, we know that the other house would have already seemed tight by now.  With two kids, three of the four bedrooms are used, and we like having a spare room.  Plus, our yard is over twice as big, we have a three-car garage (the other had two), we have over 20 mature trees on our property, and we live on a lower traffic court.

Even though our house lost value after we moved in, it was to a much smaller percentage than either the condo or ‘The One That Got Away’.

We tracked the history of that house, and what we found was this:

Our offer was in April 2007.  They kept it up for sale by owner for a few months afterward.  In November 2007, they listed it with a realtor for $279,000.  They started dropping the price around $5,000 a pop every month or two until June 2008 when it was down to $240,000 (things had been declining big time by then).   It sold in September 2008, almost a year and a half after our offer, for $220,000.  Zillow estimates it today at $204,000.

Our New Pre-School Mom.  The reason I’m telling this story is because we just got an e-mail that a new kid will be joining the co-op pre-school class for Little Boy Beagle come January.  This also showed the name of the mom, and it’s no other than the woman who lived there, and who we did the negotiations with.  I’m not sure if she’ll even remember us, but the name has always stuck out in my head.  If she did remember us (or if we mention to her who we are), it would be interesting to see her reaction.  Had she accepted our final offer, they would have yielded $40,000 more than they ended up getting, and a year and a half sooner.  Actually, it would have been more like $50,000 because they ended up having to pay the realtor fees after all.

Obviously it was not our fault that they did not accept our offer and that the market fell so that they had to take that much less, but people are irrational and she could deflect some of the ‘blame’ for that on us.  You never know.

What Would Her Story Say?  In circumstances like this, I often wonder how she would write this story.  Would she regret not taking our offer?  Would she feel at any point (then, now, or both) that we’d been low balling her?  Or maybe it didn’t matter?  Maybe the house that they eventually moved into was purchased at such a significant discount that it offset the lower price they eventually had to take.

Maybe one day we’ll find out.

Readers, do you have any stories about homes and ‘the one that got away’?  Looking back, do you regret it not working out or did it end up working to your advantage?

Copyright 2014 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.
If you enjoyed this post, please consider leaving a comment or subscribing to the RSS feed to have future articles delivered to your feed reader.

19 thoughts on “The One That Thankfully Got Away

  1. I try my hardest to put things like that out of my head as soon as the decision is made. With hindsight being 20/20 and all, the only thing that I see coming from keeping tabs on the what-ifs and what-could-have-beens is headaches and self ass kickings.

    I can’t imagine her holding any ill will toward you guys, considering it was her decision not to sell, let alone make any concessions. Then again, I gave up trying to figure people out a long time ago and she could be one of those people who blame everyone else for her own poor decisions.
    Eric J. Nisall – DollarVersity recently posted..Fact of Life (And Business): You Get What You Pay ForMy Profile

    • I’d hope so. Either way I don’t really care *lol* but I just found it interesting when I saw that our paths might cross again.

  2. Wow, interesting story. I wonder if she’ll remember you. We did not have anything like this when we bought our house. Ours was unique as well though. The couple we bought it from was getting divorced and one of the fathers had also put money into the house, so we had to get three separate people to agree to our terms. It was a headache, but thankful I finally got taken care of.
    John S @ Frugal Rules recently posted..Giveaway: Win an iPad 3 For Yourself This Christmas!My Profile

    • Sounds like a big hassle but often in situations like that it can work out to your advantage because chances are they are tired of dealing with it and just want to get rid of it.

  3. Our current home almost got away but the other person, an all cash investor, backed out after we went $2,000 above him to our final price of 79,000. I am really glad we got it because it is so cheap to own and should suit or needs ffor at least 5 to 10 more years. Yes more space would be nice but we couldn’t beat the price and location!
    Lance@MoneyLife&More recently posted..Use Credit Card Rewards to Pay for Christmas!My Profile

  4. For our first house, we thought we were coming in with a good offer, about 10K under the asking price, and they accepted without a counter! Should have offered less, I suppose. I think FSBO’s are tough because seller always think their place is worth more than it probably is. Not all realtors are great, but I think sometimes it helps to have someone tell you what your home is worth, whether you like what they have to say or not.
    Kim@Eyesonthedollar recently posted..How We Paid Off $30,000 in Credit Card DebtMy Profile

    • I think that’s what it boiled down to is that they overvalued their house. I know with the condo I was selling at the same time, there were several times that my realtor had to match my expectations with reality. Without that guidance, I’m sure I would have made similar mistakes.

    • My guess is that it might have worked out on the back end as something even, meaning that whatever house they bought they got for a lot less than they would have paid at the time had they sold it to us. Maybe we’ll find out!

  5. We have an opposite experience. We were looking to sell our first home before we took possession of the home we built. We came up with a very competitive price because we wanted it to move fast, and we were listing it privately. We figured we could offer an attractive price if we didn’t have to worry about paying realtor fees. It wasn’t long before someone was interested, but they wanted an even better deal then we were offering. They offered less then our asking and gave us 48 hours to answer. Before the 48 hours were up we had another buyer who was quite willing to pay our asking. We rejected the first offer, she countered with our asking, and the countered with a higher offer. Unfortunately it was too late. I’m sure it was a lesson for her in taking a good deal when you find it instead of trying to make it a great deal and losing out.
    Mandy @ MoneyMasterMom recently posted..Are your Finances an Amazing Race?My Profile

    • Every time you make an offer you take a risk. The potential buyer took one by offering lower. I wonder if you would have taken the offer had the second offer not come through?

  6. In 1976, the real estate market in southern California was pretty hot. We were selling our first home after 3 years for more than double the original price. We put an offer in on a house and it was accepted, but we did not sell our house. The sale fell through and we were devastated! Everything worked out because we found our dream home on a country club with a view of Los Angeles for less. Everything works out even when you think it won’t.
    krantcents recently posted..Nearly Half of all Americans Die Broke in Retirement!My Profile

  7. We also had a house that thankfully got away. We had a contract with a builder to build a home in a newer neighborhood. Many of the things that were promised to us during the sales process did not come true. Luckily, although we didn’t think so at the time, we were released from our contract before building began – probably because we had made a stink about what had been promised. A few weeks later, the builder went bankrupt and the neighborhood was extremely rundown for over a year. Sometimes, you just dodge a bullet because you are lucky…or a pest:)
    Greg@ClubThrifty recently posted..Enter Our iPad3 Giveaway!!!My Profile

    • That’s too bad. I know we actually looked to build at one point as well, and even had a deposit down. We backed out for various reasons which was good. Pretty much what happened is everybody that came in at first got their house built, which filled up about 30-40% of the neighborhood. By that point, everything crashed and it stood there with nothing else going on. I think things have finally picked back up (and it never fell into disrepair) but that must have sucked, especially since I’m sure the prices they’re building for now are much less than what those original people paid.

  8. That’s pretty ironic that the lady’s child is in your pup’s class.
    Sometimes I wish that the house we live in had been the one that got away. We bought it in Oct of 2007 a few months after being married. It was a foreclosure that now reminds me of the movie The Money Pit.
    Justin@TheFrugalPath recently posted..Finding Your Path To Financial IndependenceMy Profile

  9. Never know who you will run into in your life even if it is the person whom you wanted to buy their house. We have never run into that problem before. The lady we bought our house from was an old lady and is now retired living the high life in a condo somewhere in the city. She took a loss on the house due to lack of mainteance which I quickly resolved but could have walked away with another $40-50k if she hired some people to do some work. She cleared $150k off the sale from what she paid so she did well. Cheers Mr.CBB
    Canadianbudgetbinder recently posted..The Grocery Game Challenge Dec 10-16, 2012 -2 Weeks Until Christmas!My Profile

Comments are closed.