On the Home Front

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A Short-Sale Tale of Lessons Learned

 

A twist on the real estate forum…Not intended for those who need graphs, statistics or numbers to define an industry.

 

By Valerie Torelli

As is the case for most of us, the flux of real estate values has required a re-examination of our priorities…

I had not seen Melissa in several years, yet driving by her home, I couldn’t help noticing constant and extravagant remodeling projects going on outside.

When I received a call from her asking me if I could stop by, I went over the same afternoon. When Melissa opened the front door, what greeted me is not what I expected to see. There was clutter EVERYWHERE. Toys, junk, tons of it, strewn about. Video games, foosball machine, bikes, unopened games, pool table being used as a depository for backpacks, clothes, scattered paperwork, pet food and more toys. The closets were overflowing so much that the doors were unable to be shut. Tags still on clothes, kitchen cabinet shelves stuffed with multiple sets of dishes. Open floor space? Non-existent.

I was overwhelmed.

“We need to cut back, business is down. What could I get out of this house if I sell it?” Melissa asks.

I had sold the home to her several years ago for $620,000, encouraged her to not sell the smaller home she was living in but rather rent that one out and have a break even cash flow. In about 10 years that rental would be owned free and clear generating $2,500 per month income… Her family set!

Looking around her current home, I started to get some numbers together… If I could wade through all the stuff, get it packed up, $800,000 would be realistic…

“That won’t work, we owe over $950,000,” Melissa said.

My jaw hit the floor with enough force to make a Richter scale reading.  Seriously, how did loans like that get made even at the height of the market? Obviously some improvements were made to the home, but not close to the amount refinanced. By my calculations they had taken out over $700,000.

“Melissa, what did you do with the refi money?”

A shrug, “We were just living, you know, look around.”

What I was looking at was not “living,” I sensed only a feeling of being drowned… Drowned in debt, useless stuff and sadness. All that this home was meant to be, the dreams they had shared with me, now, piles on the floor.  Her depression permeated the very walls surrounding us.

For the next few hours, through tears, self-exploration on both our parts, we shared where we lose our way, as custodians of our homes, as working women, as mothers, wives.  Instead we fill our lives with stuff that give an immediate fix but leave a gaping hole, impossible to fill with a shopping spree. So many light bulbs went off in our minds as we connected how out of control we had become with the ease of borrowing, wanting, spending and living with a false sense of values.

I experienced much that day and felt humbled that Melissa was comfortable with me and would share the lessons of such a destructive force in her life.

I couldn’t keep Melissa in her house – that simply wasn’t possible.  What was possible and what did happen was a shift in the way that we look at what is truly important… Taking a moment to be grateful for a home.  Her “rental property” would be her new start: affordable, and though smaller, this time it would be filled with family, not fluff.

Now that is something to write home about.

Valerie Torelli is the owner of Torelli Realty in Costa Mesa. She has been involved in the conversation of real estate for 30 years. Comments, suggestions, questions, please contact the author: valerie@torellirealty.com.