Wednesday, December 7, 2011

Silly (?) Mistakes

Someone recently asked me what the most foolish financial thing I have done was.  Besides going to the casino or buying lottery tickets (only for fun, of course), I would say it was not taking the right amount of time to research our first house purchase.  We were so excited to actually get our own home we didn't think about resale value, taxes, or the other "small" stuff.  The house was purchased in spring of 2008 before the mortgage meltdown happened, and while we are so fortunate to still be working and able to afford our home, we realized we will have to sell for a loss.

We are not underwater, but when an the appraiser for our refinance said it was worth $139,500 and our neighbors sell their house (same floor plan with an extra full bathroom) for $20,000 less than that it worries us a bit.  Not only that, the house across the street sold for $75,000 and the house 2 doors down was a foreclosure and sold for $56,000, our $139,500 house isn't looking too great.

But here is the salvation from those stressful numbers...We all get too caught up on resale value when we have no plans to sell the house; numbers on a page are meaningless unless someone makes you an offer.  Too often homeowners only make improvements only to increase the value and not the living quality of their home.  The past three years have taught us houses should not be just investments - they are first and foremost our shelter from the storm.  So my biggest mistake somewhat worked out in the end (well, the quarter-life crisis thus far).  Sure, it probably won't be worth what we paid and put into it but that's not the point - it is ours and ours alone.  That's a great feeling.  We are the lucky ones.

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