Help! Home for sale - Morrisett and Maldve
A college professor and a research analyst in Austin, Texas get an education in the real estate market. The tuition is high.
NEW YORK (CNNMoney.com) -- An Austin couple, Richard Morrisett and Regina Maldve, had a lot to learn about selling a home. That education is costing them big money.
They had put their three-bedroom, two-bath house on the market in April for $419,000, then dropped it to $399,000. In June, just as they were moving to their new home, they finished negotiating a verbal offer of $393,000.
"We said, 'Sure, that sounds great. We'll take it,'" says Maldve.
Eight hours later, they had another bid - at $399,000. That's where the trouble began. They failed to land either buyer and the couple is still trying to move the property.
Morrisett is a full professor at the College of Pharmacy at the University of Texas and Maldve is a research associate there. These are not intellectually challenged people.
But they did make mistakes. One was trusting too much in their real estate agent.
In the first place, the broker held no open houses for many weeks, during the prime spring selling season. And, after the couple moved into the new house, he never told them it was bad to leave the old one bare. "We received no advice about keeping it staged," says Maldve.
But it was the mishandling of the two bids that really rankles. After receiving the second higher bid, Morrisett and Maldve's agent went back to the first bidders to ask for another $5,000 or so.
"The buyers thought they had a verbal agreement and they were angry," says Maldve. They backed out and closed on another home just a week later.
The second buyer did sign a contract and put money down. Then she had an inspection done and wanted a new roof.
Says Maldve, "It's a nine-year-old house. We were surprised. We called our insurer who sent out its own inspector; he found nothing wrong with the roof."
In any event, the buyer pulled out the day before the deadline to cancel without losing the deposit.
Steady state market
During the past few years Texas had been one of the steadiest real estate markets for buyers; the economy was good, jobs were being created and homes were affordable and remaining that way. Prices had stayed low because of plenty of new home construction. The median home price in Austin is around $176,000.
When the couple finally changed brokers (see the listing), they discovered they had overpriced the house, with comparables in the neighborhood about 25 percent lower.
They repriced it for $365,000 but still had no bites. They dropped it to $359,000 with the same results.
Meanwhile, they were now over-extended with two mortgages. They had counted on proceeds from the sale of the old house to pay for some upgrades on the new one.
They borrowed to make their payments - and worried a lot. "We can't carry two mortgages and other bills and credit cards," says Maldve.
Their salvation may be at hand. They have accepted an offer of $350,000 and took a down payment. But the new buyers have asked to delay closing until they can sell their own house.
"But we need to close before Oct. 31," says Maldve. "We've already tried to get our credit union (their mortgage lender) to delay our payment and roll it into the final payment when we sell."
But the credit union told them that a late payment would result in a delinquency notice. That kind of blemish can cost them a lot in higher credit costs and steeper insurance premiums.
They feel they must close before the end of the month. The brinksmanship is nerve wracking.
"I go to some of the local real estate blogs," says Maldve, "and read about how Austin keeps increasing in home sale prices. It's so frustrating to see these. I can't look at it without getting sick to my stomach.
Says Morrisett. "Even if the deal goes through, we've still lost more than $40,000, because of bad advice. Not to mention the loss of six months sleep and fights over where to get the money to tide us over."