Did We Make A Profit Selling Our First House?

Are you kidding? In this market? Of course not. We managed to sell it for around $5k more than we bought it for back in 2006 (in “the bubble”) and it doesn’t take a genius to figure out that we spent more than five grand on improvements (we estimate that we spent around $35K on new bathrooms, a new kitchen, new flooring, new windows, a new roof, a new patio, a paved driveway, and upgraded details like crown molding and wider doorways). This is where a “wop-wop” sound effect would come in handy.

But we’re sleeping like babies and are downright giddy about the sale of our house and the purchase of our new one. Why? We’re 100% convinced that the time was right and everything happened the way it was meant to. Are we crazy? Maybe. But here’s our thought process:

  • Our monthly payment for the new house is $200 less than what we’ve been sending in for our old much smaller house thanks to historically low mortgage rates and a great deal on the new house (which we never could have afforded in a better market). More house in a better neighborhood for less money each month? Yes please.
  • The unimproved houses in our old neighborhood (which look a lot like ours looked back when we purchased it) are selling for 30K, 40K, even 50K less than ours sold for. So not only were our projects fun and fun to enjoy while we lived there, they seemed to help our house retain its value and even improve upon it (even though we bought it when the market was amazing and we sold when the market was, uh, not).
  • We got an offer within just a few days of being on MLS, so that’s a lot to be grateful for in this housing market.

Want more details? Sure. You know we like to talk…

We’re not house flippers, we’re house lovers (hence the blog name). We never moved into our old house intending to flip it or upgrade it for any other reason than to enjoy it and make it the perfect home for ourselves in the time that we spent there. And it was. So the fact that by doing those updates we were also able to keep the house from dropping a lot lower into a price range that actually may have made us cry ourselves to sleep at night really does feel like a blessing. And we can’t forget the inexpensive backyard wedding that we were able to host thanks to diverting our venue rental budget into a new paved driveway and cobblestone patio that were around long after our big day ended. Or the kitchen renovation that spawned a blog that spawned a business that now affords us the opportunity to both work at home with our spawn by our side (sorry for calling you “spawn” Clara- it’s a terribly un-ladylike word).

Plus, it’s easy for us to see the rewards that the new house holds. After all, we’re not just sellers in this buyers’ market – we’re buyers too. And boy is it a sweet time to buy. We’ve scored our new larger house in a nicer neighborhood at a serious discount (we paid over 40K less than it was valued five years ago). Plus since interest rates are awesomely low we’re potentially saving tens of thousands of dollars in interest over the term of the loan. And since we had some nice equity in our old house to roll over into the purchase of the new one (and thanks to that lower interest rate) that’s how we got to that lower monthly mortgage payment that we mentioned above.

Plus we figure that when/if the market recovers in who-knows-how-long, there are greater rewards to be had on our new house than if we had waited around to sell our old one (which might have gone for more money in a few years, but at that point our new house might have been waaaay out of our price range just like it was five years ago when the market was doing gangbusters). And of course we can’t ignore the most important facts: that this new house satisfies our passion for DIY, offers more room for our family to grow, and helps fuel our business. Which is really the day to day stuff that helps with the whole sleeping at night thing.

But let’s revisit that whole 35K spent on improvements, only 5K of which we actually made back in the sale price. The good news is that it’s not like our improvements didn’t serve us at all. Similar houses in our old neighborhood are now selling for muuuuuch less than ours did because they don’t have any of the updates that ours has. In fact a similar ranch on our old street (only about three houses away) that’s notably bigger than ours sold this summer for 50K less (!!!) than our house did. Which makes us feel incredibly good about the improvements that we made to set our former casa apart so that it would not only hold its value but would even creep up 5K since the good ol’ days of the bubble. So although on paper it might look like we lost 30K based on what we paid, how much we put into it, and how much we sold it for- we like to look at it like this: by making the improvements that we did, not only did our old house not drop 50K in value in this bum economy, it also slightly improved by 5K. Call it looking through rose colored glasses if you’d like, but thinking about it that way really helps keep things in perspective.

Oh and here’s another interesting house-for-sale point that our lender made. He has noticed that what homeowners aren’t getting back financially from their improvements, they’re getting back in sale speed. For example, a buyer might not pay much more for your house because it has granite counters, but you’ll get an offer a lot faster than a similar house down the street that’s sporting laminate. And that has certainly been our experience. We were on MLS for 2 days before getting an offer while a similar larger house down the road is going on four months without a bite. And it’s listed for $30k less!

Do we wish the market were better? Sure. But we’ve got zero regrets. Some may accuse us of seeing the glass as half full (and we definitely don’t think everyone would make the choice to sell at this time), but these are just a few reasons why we’re so glad to be in our new house just in time for Clara’s first Christmas. Speaking of which, we’ve got some boxes to unpack…


  1. Alyson says

    “After all, we’re not just sellers in this buyers’ market – we’re buyers too. And boy is it a sweet time to buy.”

    Exactly, what a perfect way to look at it. I think you did amazingly well :D

  2. says

    I think it was completely a smart move on your part. In the end now you are paying less on the mortgage for a bigger and better house. How awesome is that? When we bought our home we knew this was the house that we would live in for years to come. Yes we had to fix it up and yes we are still fixing it up (3 years into it now) and we have a few more years to go before we finish all the projects we want to finish, but that is ok with us. We have great neighbors and now a great home and we just refi’d our mortgage to a 20 year and we are now paying just a little less then what we were paying for our 30 yr mortgage. Our home is “worth” less then what we paid for it 3 years ago, but I think if we had to sell for some reason, we would get what we paid for it, but not what we put into it. We will continue to do the upgrades that we want to do, because we will live in this house for 20+ years, so it’s ok to spend the money. We only do projects if we have the money to do them. We love our tax return every year. :D

    Can’t wait to see all the great projects you guys will have and we will all be right here to see it all happen. Keep on doing what you do Youngsters. :D

  3. Jessica M. says

    Wow!! As a real estate agent, this is the message I try to get my sellers to understand daily!! You guys are spot on with your approach and thought process and will be in a much better position down the road!

    Just curious, you didn’t have any appraisal issues? That’s the biggest challenge for most when selling the most renovated house in the hood.

    • says

      Hey Jessica,

      Yup, our buyers actually offered a little more than we sold it for (the appraisal didn’t support it, even after they appealed it so it went back down to what we sold it for). But for some reason we never really counted our chickens when they put in that high offer (we had a feeling it might not appraise for that price) so it didn’t bum us out.


  4. says

    We felt the same way selling and buying. Could we have gotten more for our house had we waited? Sure, maybe 30-40k. COuld we have afforded our new house? No way because that spread was like $200k. But our house went to contract in 56 days and we closed on both in 45 days (after some delays and additional costs for rent-backs and new lenders and ugh, never a smooth process!)

    I’d say we made out more than alright on that deal, and we’ll be sticking around for a long time to come. We still can’t believe what we got our house and property for … in Central Maryland!

    I agree that the timing was right. You guys definitely made the right move, and I can’t wait to see what you do with the place, esp that sink in the bedroom. We have one of those and I’m looking for some inspiration!

  5. says

    I love money talk (seriously, I do. I could talk about it all day). And thank you for expressing your glass-half-full approach. I don’t think it’s wrong to see things this way – it’s more realistic. You got into an situation that you now love, while you technically didn’t “make” a killing on your old house. But you’ve made something that you’re comfortable with and are ready to make your new house a home. Congratulations again!

  6. Susan says

    Consider the 35k a business expense and it’s completely removed from the equation! But that does extend the timeline for your business to be profitable. Six of one, half dozen of another …. either way sounds like ya’ll are loving life! And that is all that matters.

  7. says

    Thanks for showing your logical line of thinking and clear intelligent decision making process. Too many folks are listening to the negative-obsessed media talk about what an awful time it is to sell. Very few point out that it all evens out (or in your case, comes out better) on the buying end when you get a super great deal.

    Sending virtual congratulatory hugs on your new nest! xox

  8. Erin says

    Thanks for sharing the info guys. I admit I was curious but agree with your thought process 100%. We are going to have to sell a house sooner than we thought and came to the conclusion a while back that making improvements (that help your house stand apart) and paying down the mortgage as quickly as you can are two of the best options if you need to sell in the very near future. I also agree with other folks that some people expect too much of a return from their investment and that just isn’t realistic most of the time.

  9. Katrina says

    I would swear that either me or my husband just wrote that. We went through the same decision making process earlier this year, closing the door to our first home in June and moving into our new home in July. Like you, we also put in time, effort, and money into our first home, making it shine in comparison to the others that were on the market at the same time. We sold for about 8K more than we bought it for (yeah for us in this market!) and then used the equity that we had in the old home to purchase our new home (for a purchase price that was $40K lower than their initial listing price and about $70K less than it was estimated at at the height of the market!). We think we won and do not regret anything.

    Congrats on the new place – I have no doubts that you will make it amazing.

  10. says

    Your “big picture” advice is so smart. My hubby and I have also not gone into debt fixing up our place, but sometimes I feel a twinge of regret buying new bedding and not boosting a mortgage payment, especially when I login to our account and see how slooooowly our mortgage is decreasing. But, that’s the way these things work and I rationalize it this way: its an issue of quality of life. Sure, we could spend zip on making the place pretty and hate being here. Or, we can spend a little and love being at home, which, looking at the big picture, saves money on entertainment because we aren’t itching to leave the second we walk in the door. On the contrary, we love spending time at home and that’s worth a lot. So thanks for the sound words of wisdom and sharing your financial details.

  11. Kayla says

    I swear once on your blog, I read that you spend 5-10% of your annual income on projects in your home. I’m guessing that doesn’t include the big projects that you save up for (kitchen, bath, etc)? Just curious?

    • says

      Hey Kayla,

      Oh yeah! That’s just monthly Home Depot runs for things like paint and wood and stuff! For the big projects we save up in our high yeild savings account for months (sometimes years).


  12. Leah. says

    I think you’ve done well – the main point being you sold in a similar deflated market to what you bought, the rest is icing. We built a house in 2000 and it’s worth at least 2.5 times what we paid … but so is everything else, it’s a false sense of gain as we have no plans to cave dwell anytime soon!

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