In Part One, we confessed that we had $64,000 of debt when we got married. In Part Two, we shared how we were able to move and increase our income to turbo charge our debt payoff but then were thrown a curve ball when we unexpectedly purchased a new home.
After our new home purchase, it was time to buckle down and get back to debt payoff mode. We continued on and made great progress the first half of 2012 until August when our tenants for the old Missouri house informed us that they were moving out. Although the housing market wasn’t up as much as we had hoped for, Mr. Bug and I decided that this was as good a time as any to put the house on the market since we didn’t want to mess with being out of state landlords any longer. We contacted a realtor and she went over to the house to take pictures and put the home on the market for sale. Welcome to yet another curveball!
The tenants had not taken care of the home at all! The yard hadn’t been mowed in probably six months, the roof had leaked into the living room and the ceiling was falling down, one of the tenants had gotten a puppy (without our knowledge) and the puppy had taken to practicing its house breaking and teething all over the house. The realtor said there was no way we could sell the home in the current condition.
Before we could even think of putting the house on the market, we would have to fix up the house. I had my parents go to the house to assess the situation and get us an estimate for the repairs. Here is what the initial repairs would cost:
|Pool liner repair||$75|
With the help of my parents, we hired the contractors and the repairs begain! Finally, after one month of the house being vacant, the repairs were complete, the house was ready to go on the market, and now all we had to do was wait for an offer. So we waited…..and waited….and WAITED! By this point it’s December (house went on the market September 2013, the house had only been shown a handful of times, and we STILL haven’t had one single offer. By the end of the year we were exhausted and tired of paying two mortgages so we knew it was time for a change. We hired a new realtor who had sold one of our friend’s homes in record time (two weeks).
The house was listed with the new realtor in January at a lower price and within a few weeks he was showing the property on a regular basis, woohoo! In March we had our first offer on the home. $10,000 less than the new list price so we counter offered but they did not accept. We had our next offer a few weeks later at only $5,000 less than our list price so we did the happy dance and accepted. During the due diligence period we received our first set of bad news, the roof, which had been repaired the previous year during the renovation, was leaking again! We had the roof repaired (again) and had the drywall and paint done (again) and thought we were good to go. Wrong. The termite inspection came back stating the house had termite damage and wood rot that both had to be remedied. We had all the repairs done and we had a deal! We closed on the sale of the Missouri house in May 2013. It was wonderful to no longer be making two monthly mortgage payments but the sale of the home was costly. As was the case with many people at the time, we had to take a loss on the sale of the home. By the time we paid for all the repairs, remaining mortgage balance, and the realtor commissions, we had an additional $18,000 in debt. Ouch!
As of May 2013, our current debt was:
|Home sale debt||$18,000|
Here’s a fun little graph to show you the evolution of our debt journey:
We now had an additional $10,000 of debt from the previous year but we no longer had to pay two mortgage payments per month so that saved us quite a bit. While we took a loss in the short term, it was worth in the long run. We got back to the debt payoff plan full steam ahead!
Stay tuned for Part Four of our debt payoff journey.