Father Sez

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We have sold the house

Sunday April 13th, 2008 by fathersez

This journey, leading to the signing of the S & P last Friday, started shortly after my wife and I studied the first ever family budget that we had done. Not good! 

Then we did a review of the family loans and applied the DTI ratio that I read about in Moolanomy. (The Digerati Life has also written about this. Both are very useful pieces of information for would-be borrowers and others like me, who may never have run a health check on our loans.)  The results of the loan review were, needless to say, not good, and this was the final straw that led to my wife and me deciding to put up the house for sale.  

(We bought this house quite sometime ago. About ten years ago, we shifted and this house has been rented out since then.) 

I have read that some bloggers, like Brooke would prefer to handle the sale themselves. We appointed an agent and are very happy with her efforts. Still, I must mention that there was hardly any interest, until I followed FMF’s sound advice on not making the single biggest mistake of home sellers  

I have now signed the S & P agreement, and the buyer has paid the 10% deposit. There are still a few formalities to be settled before the property actually changes hands, and we receive the rest of the money.  

My wife and I have agreed that the proceeds, after paying the costs of the sale will be used primarily for debt reduction. Our loan profile “before” and “after” our planned debt settlement will be as shown below.  

All figures in %

 Before  After
     
 Overdraft             7.00               -  
 Car Loans           60.00               33.00
 Mortgages           33.00               67.00
     
 Total         100.00             100.00

Some amounts are being set aside now for family expenses expected to arise over the next couple of years. (This was at the reminder of my wife and I think it is lucky that I did not overlook this.) 

At the time of the loan review, we figured our “after sale” DTI (Back ratio) to be 7.40%. The present estimates (after debt reduction and amounts set aside) are at 11.80%, still a fairly respectable rate, I think.  

The sale also marks another milestone of my plan to quit the rat race 

Selling the house was not that simple a decision to make, despite the fact that we had not been living there for almost 10 years. The house is in the capital city (we now live in a slightly more rural setting, about 60 km away from the capital), and there were thoughts about shifting back to the capital someday.  

Even after making the decision to sell, signing the S & P was another toughie. There are emotional ties to the house.

I’ll write more about this tomorrow.  

 

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7 Comments for “We have sold the house”

by Emily
On April 13, 2008
At 8:01 pm

Congratulations!!

On April 13, 2008
At 9:16 pm

Thanks, Emily.

On April 14, 2008
At 4:27 am

Congrats! It was a sensible move given the financial situation of the house and rent.

On April 14, 2008
At 1:23 pm

Wow. Congratulations on such a huge decision.

On April 20, 2008
At 9:09 am

Hey that’s great news! I remember how elated I was when we got to sell our house :) . Just a relief! Congratulations on this!

On April 20, 2008
At 10:35 am

Thanks, folks.

It’s a relief all right. Carrying too much debt was getiing to be too much of a load for me.

On April 20, 2008
At 10:52 am

I know what you mean about “debt being too much a load”. When I had student debt (which is not close to comparable to a mortgage) I felt heavy and buried. Again, congrats!

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