Real Estate

Falling house prices and the bursting of the real estate bubble have been at the forefront of the news for many months now. Southern Calvert County (Maryland) was one of the farther out areas of “affordable” housing that was badly affected as were similarly located suburbs elsewhere in Maryland and Virginia. Into this mess we chose to venture.

While in Arizona in April we saw a senior living community that offered a model home we thought ideal, 1,800 square feet all on one level. We put down a deposit on a lot at a price made feasible through a substantial discount offered by the developer. Score one for the buyer’s side.

Back at the ranch, that is, at our second home located less than a mile from the Chesapeake Bay, market prospects were grim. We had concluded that at our advanced age and the general dispersion of the family, it didn’t make sense for us to continue to keep up two rather large, three story residences. Our unique, custom built contemporary could, we think, have sold for close to $400,000 in mid-2006. In mid-2008 there were over three hundred houses listed for sale in our ZIP code, none of which seemed to be selling. Our real estate agent was hard pressed to identify “comparable” properties since among the 4,000 houses in the Chesapeake Ranch Estates there was none like ours. To get a feel for the going price we engaged an appraiser. Bad move! The woman came out, didn’t particularly like our appreciate our house, identified three “reasonable substitutes” – one split level and two Cape Cods - for our house that had sold recently within a couple of miles of us, and came up with an appraisal of $282,900. We were shocked, of course, $400 down a rat hole, as it were. Score one against the seller’s side.

With trepidation we put the house into multiple listing on August 12, with an asking price of $329,900. (We ignored the appraisal and used our own sense of market value.) That weekend a husband and wife with one daughter came by with the feminine members “falling in love” with the place. Within a week we had received an offer, quite low, responded and had our counter-offer essentially accepted. The effective selling price after seller give-backs was $315,000.

The formal selling price was $324,000, which is the value of the 100% VA-guaranteed mortgage. By our covering $9,000 of the buyer’s closing cost, we effectively allowed the buyer to amortize this portion of his closing costs, saving cash, and paying out this amount over the life of the mortgage. All of this hinged upon an appraisal coming close to the asking price. This appraiser came out with a figure of $324,000. Our real estate agent thinks this is because she met with him and put forth a number of “comparables” favorable to our cause. There is also the suspicion that appraisers still have an institutional bias to justify the proposed level of mortgage. That this appraisal was $41,100 more than the earlier one was gratifying. Real estate appraisal, like the practice of medicine, is an art, not a science. Incidentally, most of the houses in the area with “For Sale” signs remain in that condition. Someone once said that it is better to be lucky than good!

Then began the fun! We had in the course of about 5 weeks to empty out our house, dumping some of our goods, carrying others to the house in Potomac and yet another collection to put in storage pending a move to Arizona. Some even were transported to Pennsylvania. We dumped, among other things, 3 old analog TV’s that in today’s digital world were without value. For an old man with bad knees I spent a lot to time carrying boxes up and down stairs and loading our pickup truck. We brought to Potomac five truck loads of things, much of which remains to be stored properly in the new surroundings.

Our life style has changed. For 17 years we drove nearly every weekend the 160 mile round trip to the beach house and back. It was a lovely home and there is much that we will miss: breakfast on the deck surrounded by trees; walks to the Bay; expansive rooms bathed in sunlight, a full moon bathing the bedroom in light through the skylight above; and, a car port that we’ve never had elsewhere in Maryland. But now the house has new owners, much younger than we, who will hopefully provide care, attention and derive enjoyment in the years to come.