Homes Cost Too Much! Everything Costs Too Much!

[MineralMan]

82. Probably nobody has done that.

For most people buying or selling a home is not really a business transaction. Most people do it for other reasons, and it's unlikely that anyone would deliberately sell a home for less than market value. In fact market value is determined, in the end, based on what someone paid for a home.

When I sold that cute cottage in California, though, the young couple who bought it so eagerly concerned me. Before I agreed to sell to them, I spelled out all of the costs they would have due to buying it. I wasn't sure that they were in a financial position to buy it, frankly. Also, since the house's property taxes were protected under Proposition 13 while I owned it, that protection would go away with a new buyer. I explained what the monthly costs for property taxes would be, since the house would be re-appraised by the county, based on the selling price. They convinced me that they could handle the load, so we did the purchase agreement.

However, the house did not appraise at the original selling price, complicating their mortgage loan. So, I agreed to lower the price so their mortgage would go through. I didn't have to. I had three other offers at the original price. But I liked the young couple who were the buyers, so I cut the price so they would qualify for the mortgage. So, I suppose I did sell below market value to help them buy it. A few thousand dollars.

They still live in that house, 18 years later. We exchange Christmas cards every year. It's worth a LOT more than they paid for it now. California coastal real estate prices have gone bananas.