Bringing a check to the table

Patrick,
 
Today is a great day - I'm SELLING my house - and go to the closing table in
about 3 hours. I've been reading your site now for a couple of years and it's
about time I've contributed...
 
My wife and I live in Fort Worth, Texas - where home values haven't really
performed better than the rate of inflation. We bought our house last year in
Feb. 2007 for about $117,000. Our loan officer said we were approved for close
to $373k, but we wanted to play it safe - I've never been a huge fan of debt,
and my wife and I both like putting money in the bank regularly...
 
Moving on: we decided to sell it this year because we want to relocate near
family on the West Coast.

When we initially bought our home in 2007, $117k was about 10-20 grand less
than all the other homes were going for in the neighborhood - considering they
were almost brand new and cost the original owner about $130-140k. We bought it
off a short sale, and paid less than the appraised value and the tax appraised
value - oh and we did 100% financing. We figured it was a solid deal and we
that the real estate downturn wouldn't affect us that much and that we'd never
owe more than our house was worth - based on location and the price we paid.
The day we purchased it, we could have probably resold it for $130k.
 
Anyhow, just a year later (2008) and we decide to sell. Home prices in our
neighborhood had dropped a good bit, and homes that were put up on the market -
sat for months. In fact there is a house that has been on the market for over a
year. We still thought we'd break even if we sold our house because of how
cheaply we were able to get into it for.
 
Realtors are a f***ing joke. They are the scum of the earth. We interviewed
several to help sell our house and I swear they get paid a ton just to LIST the
house. 6% commission? They can kiss my ass... They said with the way the market
has turned, we could get about 110k-112k for our home. On top of that, we would
have to pay over 10 grand in fees (title, commissions etc...) What really gets
me, is that out of the 10 grand in fees, about 7 grand were commission for the
realtor.... We said screw the realtor, and paid a flat fee MLS company $500
bucks to list it, give us a yard sign and a lockbox. The least we could do was
cut the commission in half and pay the buyers agent 3%.
 
So in about a year, we went from 20k in equity, to about 10 grand in the hole.
 
We decided to list our house @ $118,900.We didn't know if we'd get that much or
not, but we slapped a coat of paint on the walls and crossed our fingers - even
at that price, we knew we'd have to shell out a few grand at closing because of
all the fees involved.
 
14 days and 3 offers later, we finally get a solid offer for $116,900. That was
more than any other house had sold for in my neighborhood this year and we knew
it was about best chance at getting out. By the way, the other two offers we
received were extremely low. I would have had to take out a loan the size of a
small car if I were to have accepted one of the low offers, just to get out of
my mortgage. The catch with the offer we accepted was that the buyer was using
an FHA loan - leaving the seller responsible for a chunk of change - the
closing costs for the buyer. We told the buyer we couldn't cover the FHA fees,
and they agreed to pay them - bringing the total of the house to 120,900.
 
Now, when you use FHA financing, I believe the buyer can't finance more than
the 98.5% of the appraised value... and that the seller is supposed to pay
closing costs.. am I wrong? Well, we just got a summary sheet from the title
company with a breakdown of who's paying what.. The buyer is financing about
$130,000 for our house AND is receiving cash back out of the deal. Showing you
that realtors and appraisers are still in bed with each other. They inflated
the "value" of our home, when they know damn well our house isn't worth that
much. Seriously, just pull the comps in the area; our house was worth nowhere
near what they appraised it for. How can you do 100% financing on a house that
isn't worth the' appraised' value?
 
Our house might be worth $105K as of this exact moment. Homes are sitting in our
neighborhood. Several people have already given up trying to sell' The house
right next to the one we are selling today is vacant, and I've seen people walk
out of their homes in the past several weeks' which is only going to
contribute to the current decline in prices. I'm just shocked that
realtors/appraisers are still committing fraud. I didn't think you could do
cash back out of deals that were almost 100% financing. I didn't know you could
inflate a home back to 2005 levels and get away with it...
 
Whatever right?
 
In about 2.5 hours I head off to the title company, with a $4,800 check. Yes, I
have to pay $4,800 to sell my home because I'm still liable to 3% of the
commission and the other bullshit fees. Am I pissed? Well, I'd really like to
keep that check, but I feel pretty lucky getting what I got for the place in
this market. Now, I know anyone reading this will think who cares? You only had
to pay a small amount to get out of your house.. True, but you know how they
say all real estate is local? Or that DFW real estate is the best value in the
country? That's all bullshit too. Although homes around here are much cheaper,
we are getting hit too - not to the extent of Florida, Cali, Nevada etc... but
the NAR is lying about this area - saying that home prices in DFW have
appreciated SINCE 2007 - bullshit - they haven't.. They've dropped. I've been
following real estate, and prices keep going down around here. If you bought in
2005, you're already out $20-40 grand already for a 1500-2000 square foot home.
 
I'll cut my losses today Patrick. I'll shell out $4800 to abandon the "American
Dream" of home ownership. On my way to the title company, I'm going to spend 10
bucks at Starbucks for an overpriced, undersized, burned cup of coffee... and
I'll enjoy never paying a mortgage again. In 2.5 hours I will have ZERO debt. I
will never be a slave to banks or credit card companies again. I've worked
too hard to live debt free, and financing a house is one of the biggest
mistakes I've ever made' I'm going to keep saving my ass off, and if I
ever do decide to buy into the idea of home ownership, I'm paying cash.
 
Thanks for your website.
 
Mike -- Fort Worth, Texas