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In 2018 my partner and I decided it was time to sell our first house, which we were able to keep and rent for the past 11 years. We saw this house as an investment that would enable us to have some retirement money. We still had a mortgage on the house and were basically just covering the costs by renting at below market value, as we wanted to make our house affordable.
Being landladies has had its challenges, as being softies, we had allowed our first renter to walk all over us: at times we had subsidized her rent for a while, when she lost her job, and charged her no rent at all for the last month that she lived there. We were rewarded by her leaving the place a total mess with unpaid utility bills and a ton of stuff she had bought on eBay, even though she supposedly had no money!
Lesson learned! Our most recent tenants have been way better. However it always seems that whenever we are away, for a weekend or a longer vacation, something major would go wrong, like a water pipe bursting or the front door getting kicked in, and I would have to scramble to get things fixed from afar. Luckily, I have great contractors who can help, but still it was always a pain.
There is a lot to be said for paying a good property manager!
Anyway, we felt it was time to sell. Our property is in Columbia City in an area zoned for town houses; in fact our house was surrounded by them, so the value was really in the land.
However, timing is everything and when we listed our property, Trump had initiated the tariffs on timber with Canada and steel with China and builders were getting more conservative in their bids. Looking at properties of similar zoning and lot size. I expected to get a comparable amount if not more as we were in such a good location, just a block from the PCC.
Initially we received three offers. One was $100,000 over the asking price from a legitimate builder.
I had received lots of letters over the years from interested parties before my house was listed and surprisingly enough, not one of those solicitors put in an offer! Which reaffirmed my belief that they were looking to buy it for less than what it was worth.
We accepted the highest offer and had to wait for them to do a feasibility study. I had been pro-active and had had a survey done, and knew that this property was on a flat piece of land with an improved alleyway, with no major issues to prevent development.
A few days before the feasibility contingency was up, I was asked to take down all the big trees that provided a screen at the back of the yard. As I did not want my tenants to lose their privacy, I agreed to take them down, but much nearer to the time when our property closed, which was in three months. It was a good thing I did that, as a day before the feasibility contingency was to be removed the buyer rescinded their offer, due to the financial instability of the stock market when it took a big hit in December.
We were not the only ones to lose out. They backed out of three land transactions.
So, we were back to square one, which was very disappointing. A feasibility is just like an inspection contingency however they are a lot longer as a builder must check with the city to determine what can be built, what utility costs will be, etc. This can take a long time, at least a month and often longer.
The buyer’s agent, however, felt that they could find other builder, so we gave them two weeks to do so and they did. The price was a bit lower but at this point Jacki and I just wanted to be done. It was a good experience to be in a seller’s shoes and go through the emotional roller coaster personally, as I have even more respect for my clients when they are in this boat.
We are now pending and close at the end of August. We will be doing a 1031 tax exchange in order to avoid paying Capital Gains Tax. If you have an investment property and would like to avoid paying that huge tax, please contact me and I will explain how it works.
