Expectations vs. Reality of Selling a Home in a Recovering Economy

Approximately 10 houses in our neighborhood are for sale. The average price of the homes can be found on a few websites, zillow.com, eppraisal.com, and cyberhomes.com. Unfortunately they do not show the true sales prices b/c sellers concessions are not deducted on these sites. Property tax documents can also show the most recent sales price.

history of the average sale price of homes on our street
end of 1970's 40K
mid 1980's 70K
end of 1980's 90K
mid 1990's 105K
2003 130K
2004 180K
2007/8 200K

The uptrend of these houses was significant. One real estate agent was surprised that I realized that I would not be able to sell for the 2007 prices. Inflated home prices take a toll on families' life styles when the homes are no longer worth the same or higher amounts. Was 2007 the peak of the real estate boom? What does that mean for families who bought on the upswing and are trying to sell now?
When we purchased our most recent home, the seller's agent mentioned that he has sellers that are bringing money to settlement. Sort of frightening. The home owners are paying money to be let out of their housing commitments.
Could the housing market slump have been predicted?

So How Do You Impulse Buy a Bedroom Set and Still Get a Good Deal?

1. Wake up in the morning and realize the air mattress isn't cutting it anymore.

2. See signs on the road advertising 50% off sale of mattresses.

3. See more signs on the return trip advertising a mattress sale.

4. Visit an empty showroom -void of customers.

5. Ask for discounts.
a) returned, unopened bed.
b) % off the frame.
c) Free delivery.

6. Sign on the dotted line.

7. Review the purchase.
a) Didn't pay full price.
b) Mattress was a need.
c) Wasted 1 hour tops.
d) Not free delivery but next day.
e) % off the frame.

8. Problems
a) Low expectation of keeping with original mental price for the bed.
b) Price shopping didn't happen.
c) Two people sleep on the bed; only one person shopping.

Last mattress shopping trip was 10 plus years ago. Recall paying $400 for a queen mattress, box spring and delivery. Expectations for a king was around $500. Paid just under $1000.

Interesting approach by a salesman when a couple was not ready to buy. It sounded more like a sales pitch for a car than a mattress. I think he even asked what was the reason for their financial restraints on the purchase.

Now back to the original problem. Signs were indicating 50% off mattresses. The selected mattresses that were for sale were too expensive even on sale.

I think my husband should go to another mattress store and try to get the best offer possible. Then we can compare and see if I got the best deal. In reality, this is a waste of time because the purchase is already made. Move on with life. This particular store has a price match plus 10% so it might be helpful.

Sometimes impulse buys work but you never know for sure if there was a better deal around the corner. You just need to be satisfied that it was the best deal that you could make at the time.

Credit Card Spending

How Does Credit Card Spending Get Out of Hand?

1) Spend more than you make each month.
A. Don't spend more than you are able to pay off each month.

2) Credit cards allow you to pre spend your future paychecks.
A. Set a cap on your credit card spending each month.

3) High limits allow us to charge more than we should spend.
A. Be disciplined and set your own limits that you do not want to go above. Some banks have high spending emails for your credit cards that you can set up through your on line bank account.

4) Store credit cards normally have a higher interest rate than non-store credit cards.
A. Try not to use the store credit card if there is a possibility that you will not pay it off by the due date.

5) Carrying a balance.
A. Do not charge on a credit card if a past due amount is on the credit card.

Reduce, Reduce, Reduce

When we are younger, we have small bank accounts and small areas to store things. When we get older, our bank accounts hopefully grow and our storage areas increase.

Our need to have possessions unfortunately can overwhelm us. Our computers are maxed out of space, our credit cards could be maxed out and our homes are maxed out. Did you ever feel calmer in a hotel room rather than your own home? Look around the hotel room. You have no work to do and no clutter to clean.

Now imagine your home / room how you want it. What do you need to accomplish that goal? If your stuff = headache, get rid of the stuff. What is your weakness? Retaining books, gifts received but not used, stationary, computer equipment or toys. If you went to the store, would you rebuy the items you have now?

As you reach the end of spring, take the time to let some things go. Whether it is the picture frame that needs repairing, the tv that is outdated or your favorite pillow that you already replaced.

Buyers Remorse

I don't have a lot of buyers remorse for items that I purchase. Upon cleaning out most of my receipts in my wallet I realized that part of my family and myself walked into or went to the drive thru at over 22 restaurants in February, March and April. How is that possible? Most were probably when we were out and needed to get something to eat.

I thought of another approach to cure the hungers or munchies. Rather than visit the restaurant, why not visit the grocery store. For $22, I purchased snacks for 16 people. The items were juice boxes, packages of peanut butter crackers and apple slices. You can also brown bag these items so the children feel like they are getting fast food.

Restaurants are expensive. Not to mention paying 15 to 20% on top of the already expensive meals. With a little planning and possibly research you can go to kids eat free places on the correct days and have bagged lunches ready to go for the entire family.

Incase any one is wondering the receipts for the restaurants totaled $300!

Effective Way to Prevent an Impulse Buy

Let's assume you were going to a department store for a certain list of items. You thought about what was in the store and composed your list. Something catches your eye. You resist. Something else catches your eye. Obviously we can't put blinders on in the store but that item is a need. You just did not know that you needed it prior to entering the store. That is the key. The item that you did not need prior to entering the store now you suddenly need.

Sometimes you will make the purchase and sometimes you won't. The rational that even though this item appears to be a need; you had no idea that you needed it prior to entering the store. "It is probably a want." Maybe you could adjust your list to fit it by not buying another item. If you do that you might not have really needed the other item if you were so ready to give up purchasing a listed item. So cross off that item and skip the want posing as a need.

Saving for Something

If you are saving for something; do you tend to spend less?

Back in May 2005, we financed / leased two new automobiles. We were told to pay these off within 3 years (lease) and within 5 years (purchase). Soon after I found an article on doing snow ball payments. The idea was that within 7 1/2 years you could pay off all of your debts including your mortgage. We tightened our belt straps and started on our journey.

By applying 10% of our take home income per month to our shortest debt we paid off the lease portion on one car. Then we applied the extra 10% to our financed auto, plus the payment that we used to make to the lease company. By March 2007, we paid off our auto and rec. our title.

In most circles we would be considered debt free but I "still" consider a mortgage a debt. Our next step was to apply the 10%, lease payment and the car finance payment to the house.

May 2008 we needed to make another auto buying decision. The result was a used car and no financing.