So, should we try to sell my parents’ house as is or fix the most obvious problems?
Background, mom & dad need to move into assisted living. Their biggest asset is their house. However, the house has fallen into a bit of disrepair in the last several years. The biggest problem is that for years they’ve gotten water in their basement. The second biggest problem is needing to fix both bathrooms (flooring in the main and plumbing and flooring in the second).
Fixing the water problem looks like it’s going to be a 8-10k fix. The bathrooms I don’t even know. But our fear is that without the water fix and a warranty, we’re a) going to have a tough time getting people to even look at the house and b) take a bath on the price. On the other hand, if the loss we’d incur in not fixing it is less than the cost of fixing it… well…
Pluses of the house are that it’s in a good school district with an elementary a block away and would be affordable for a young family, or affordable (I hope) to buy as a rental property.
So, how do you make this decision? Invest in fixing it and hope to break even or even make some money, or sell it as is and hope you don’t take a bath? (Ha, bath. Water. Basements. How Freudian.)
My parents sold their home last year, after 20 years of indifferent maintenance and no upgrades. Putting 8-10K into it would have returned a heck of a lot more.
The market is worse now and people are going to pass by homes that need a lot of work, unless it’s priced significantly under the others in the area, and I mean SIGNIFICANTLY. My parents’ home sold for $100,000 and with 10K of work, could have sold for $150K (what the neighboring home, with an identical floorplan, is assessed at). It also might not have taken over a year to sell.
Houses for sale where I live have to have a truth in selling statement, that includes things like, have you ever gotten water in the basement, and what did you do about it.
So the potential buyers are going to know that there is a water problem. Unless you are in a very exclusive neighborhood, that’s going to scare off a lot of potential buyers.
As for a warrenty, get one. They are cheap. I think ours was $300? We learned something interesting. The warrenty not only covered the first year the new owners had the house, it also covered anything that went wrong while we were trying to sell the house, for upto a year. So if the stove had died before we sold the house, it would have been replaced by the warrenty.
I think the water problem MUST be addressed. The only people who would look at a home with that type of problem in this market are those wanting to buy the place very, very cheap.
I would ditto this for the plumbing in the second bath. However, the flooring you may be able to hold off on. You could offer a $1,000 credit to a buyer with the idea that it’s to replace bathroom flooring with something of their choosing. Walter Lang and I have been house hunting lately and more than one seller has offered this type of incentive. It makes older properties with cosmetic problems more appealing because buyers can imagine the new floors and whatnot they would install with their credit, even if they never wind up doing it.
We re-did the floors in our house before we put it on the market. The agent saw it before and after the changes called it a jekyll-and-hyde house. It really was like night and day in the look and feel of the house - quite a shame we hadn’t done it earlier! Anyway, our agent upped his previous estimate of the house by 20K and due to a bidding war, we got 10K above that asking price.
I can’t help you with a wet basement. I’d really have to be nuts about the house to buy it with a known wet basement.
Yeah, and this isn’t a house anyone is going to be nuts over. Just your basic late 60’s split level.
Sorry so late in responding, I was talking to my sister about the house!
We do know we have to disclose, and y’all’s comments mirror my feeling, that a untreated basement becomes a big bargaining chip in the buyer’s favor to drive the price lower and lower.
I’d fix the house up (on the cheap, just like we’re doing with our house). I believe there are two levels of fixes to a house you want to sell - one level of fix makes you more money, and one level of fix makes people want to or not want to buy the house. Water problems and bathroom problems are make or break for most people - these are not personal preference problems. People simply don’t want to buy a house with your kind of problems.
The house-buying public are kind of foolish, too - they don’t look at the potential of a house, they look at what it’s like to move in right now. They have to be able to see themselves living there, not imagine what a good deal it is and how great it would be with $15,000 worth of renos. Not only would I fix the problems, but I’d do the cosmetic stuff, too - new paint top to bottom, new flooring if necessary, new light and plumbing fixtures. That kind of stuff is quite cheap for the return you get on it.
The way I look at it is, moving is stressful enough already. We’ve already done our fair share of fixing up stuff (and still doing it too), if we moved we’d want to get a house that was ready to live in. We could live with a house that had burnt orange or avocado green shag carpeting, or even kitchen appliances in one of those colors (but not both, you understand). But if we had to move in and IMMEDIATELY start repairing the house, well, I don’t think we’d do it.
We’re fortunate to be in a relatively good place right now, financially. Only one kid, and she’s not a kid any longer, she’s out of college and flown the nest. My husband has a well-paying job, he’s one of the best in the area, and it’s a government job. Folks who are not as financially secure as we are might well compromise on livability if they can get a great deal on it.
We MIGHT make an offer on a house that has problems with it, but we’d think about it for a long time. And our offer would be considerably lower than it would otherwise be.
Worse than that, you’d be competing against foreclosures sold by banks who want to unload them. In this market, waiting won’t hurt, and fixing it up might let you get into a better class of buyers.
A couple of years back buyers might be looking for fixer uppers to get into the market. That’s probably no longer true. When we looked, before the bubble, we just scratched any houses with obvious problems. There was inventory then, but nothing like now.
Will you be able to stage it? That might help also.
It will cost more to fix up than you will get for fixing it up, except perhaps for paint. You can also list “as-is” fixer upper formerly lived-in by elderly people and be less likely to draw lawsuits over non-disclosure of problems. Anything you fix will be expected to be fixed nearly perfectly.
I disagree, The Second Stone. I just shopped for a home and anything that had water problems was automatically disqualified regardless of price. I would have considered it if it was handled in some way (I simply didn’t see any that were). Here in Iowa, water problems are #1 on Things You Do Not Fuck Around With when buying a home, though; YMMV.
We came at it from the other end and bought a fixer-upper from a guy that needed to sell fast in an area we generally couldn’t afford because the parcels are all over 5 acres. There were a ton of smaller problems that we could do all of the repairs ourselves on and the only expensive thing was to replace the septic system. In the end he came down $100K to get us to buy it without repairing any of the problems. It would have cost him less than 10K to get it done before the sale. We made out great, but I’d get them done before a sale if I was on the other end of the deal.
Yep. I think if we don’t do everything we can possibly afford - within reason, of course - we’re going to hurt ourselves in the long run. The house has to fund a good chunk of my parents’ living expenses, and the way I see it, we - their children - pay for it now or we pay for it later.
featherlou - thanks for the reminder on the fixtures. You’re right, not very expensive and goes a long way to “update” a house.
I will be facing a similar problem when my dad is gone. My husband says sell cheap and don’t bother with the fix-ups. However, the biggest problem is a cracked slab, which has put a 1/4" (or bigger) crack across the entire house…up the walls and across the ceilings. It’s definitely going to drastically lower the price we could get.
I don’t know if this is fixable or what it would cost. I’m not concerned about the drywall portion, but how much does it cost to fix a cement slab?
Yeah, I definitely understand about not wanting to move into a house that needs repairs, but during the housing explosion of a few years ago*, I lost count of how many people had the attitude of, “I don’t like the paint color in any of these rooms”, “This carpeting is really gross” (meaning, not to their style, not as in dirty), or the BEST: “I really don’t like the furniture they have.” Mothafucka, you aren’t buying their goddamned furniture. What is the fucking problem???
and now too, but since it’s such a buyers’ market, it’s a titch more understandable. I still think it’s stupid.
I’m a renter, but began my education with Sell This House. Followed by graduate work with the British House Doctor. One doesn’t want to test the intelligence, creativity or imagination of possible home buyers. Some people* will *get turned off or distracted by furniture. Yes, it’s stupid. But stupid people sometimes have money.
When going through a house, each room that badly needs new paint or a new floor makes that kaching sound. And it adds up, in a buyer’s market.
But serious structural problems *really *need to be fixed.
I know, I’m just saying flat out that they’re stupid if they won’t buy a house based on furniture.
All it means is that I’ll be able to possibly get a great deal if I ever go to buy a house. I can look at an all-yellow, hasn’t-been-redecorated-since-the1960s-but-is-structurally-sound ugly house and get a great deal on it, since everyone else is blinded by its hideousness.
That’s what we did when we bought this house, and hope to do for our next one, too. The thing about stupid buyers, too, is that they see an updated house and think it’s great. Jim and I look at an updated house and see how crappy the renos were done and don’t want to pay extra for someone’s crappy workmanship that we’ll have to rip down and re-do properly. Uh, my point there, Niblet_Head, is that most buyers see the renos, not the quality of them, so do them yourselves whenever possible with the cheapest possible materials. And paint everything beige.
Unless you’re going to auction it, I suggest you fix it up and rent it out until you find a buyer. This will mean you get a decent price for the house and your parents have a bit of income.
Yeah, we’ve tossed that around a bit, but that means someone has to be a property manager, or one has to be hired, and we’re a bit loathe to do that.
OTOH, I haven’t really begun the look for assisted living in earnest, and they may end up on a long waiting list, giving us more time to make changes/pay for changes.
