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Does this sound silly?
I have been bothered by this for some time and now that I have experienced people to ask... I just have to ask.
My parents own the home I live in. We are preparing the home for sale. It needed a lot of minor work which my husband and I have been doing ourselves. From all my research thus far, I have learned that you want your property to look as best as you can to get the most potential out of the situation. So for me, that means making sure everything is fixed/working and that it looks good visually.
My parents have a real estate agent they have worked with since 1995 and they really like him and trust him. He's an older fellow and very nice. We had him come by the house while we were still doing some work on it. Some things still needed painted badly, the hardwood floors needed polished, the tub needed recaulked, and I only had 2 out of 6 of the new six panel doors installed, among a few other things. The agent told me not to bother with any of it and to just list the house for sale now, as is. It seemed crazy to me because as it stands, we are not profiting much off of the sale (just breaking even) in the first place because of the economy. It's being sold out of necessity more then anything.
So, am I wrong to think it's crazy for us to just list it as is, if we want to get the most out of it? It does mean there is a delay in listing it, but that's ok for us. What are your thoughts on that?
You should be asking him those questions. Could be a number of reasons. It's one thing to clean, paint, caulk and so on, but you may be trying to go outside your comfort zone (and his) by hanging doors and doing home remodeling that will cause delay in listing.
I went to the library today and got several books on selling/staging your home for sale. So far, what I have read is that the first impressions for each room and your curb appeal are very important and set the mood for the buyer. If someone comes in and sees things that need fixed or that look bad, the immediately have a feeling of "there's work to be done here". I guess because I am getting that feeling myself, then I am certain they would as well.
I could see where he wouldn't want to delay in listing, but it just doesn't seem right. Call it a gut instinct. He might think it's out of my comfort zone to things of that nature, but it certainly isn't. That's a good point though. I guess I am just one of those people that believes... if you are going to do it... do it right... and blow them away.
Jessica,
It really depends on how motivated you are, and who your target buyers are. If you want out quick and time is more of a motivation than money, then I would market it as a "fixer" at a low price to sell it quickly to an investor.
However, it sounds like you are interested in gaining experience/knowledge in real estate investing. If this is the case, then if I were you I would absolutely spend the time, effort and money to do the minor fixes you mentioned and market your property to a retail buyer.
Most retail buyers do not want to do work when they move in. Pay attention to all the little "fixit" details, stage appropriately, and make sure the place is clean during showings. Stick with a neutral color scheme to appeal to more buyers.
The latter method will obviously take time, money and energy- so make sure you are ready to deal with it.
Best of luck,
Owen
Thanks Owen. Even though this house belongs to my parents, they will be splitting any profit with me since I have been taking care of and upgrading this home, as well as paying the mortgage, since they purchased it. So even though I didn't personally buy it, I am looking at this as sort of a long term flip for me. Trying to see what I can make of it and then learn from the whole process of actually selling it. I'm making sure to be very involved in everything.
We have done a lot to this home. New siding, windows, AC unit, and interior remodeling. I am all about designing for today's young families (in this house) since this home is more suitable for such and that seems to be the trend in this area. I have lived in many places, studied how people live, and I have always been very observant of changing trends and styles. I get a lot of compliments on my decorating sense. I am confident that I can produce something better. I just hope I am not just "full of myself". Ha!
I'm hoping the agent will come back and say... "wow! You really made a difference!" I guess we shall see!
Hi Jessica,
If I was in your situation, I would pick the two or three things that would get the most bang for the buck. Painting is probably number one if it's needed. I wouldn't go and remodel the bathroom or kitchen, because although those things will get you a better return than other remodeling projects, the return will still be less than 100%. If you're thinking of selling soon, that's not going to benefit you. You can spend $100 on paint and supplies and make a huge difference in prospective buyers' first impressions. Caulking cracks and gaps in molding can make a big difference too.
Hanging doors is something you don't want to rush through. If you've done it before and you know what you're getting into, and if the new doors are much nicer than the old ones, go for it. If you've never done it, you'll probably end up spending much more time and money than you want to. Keep in mind you'll most likely have to replace the door molding as well, then caulk and paint. If you do decide to do the doors, your best bet is to go with pre-hung, pre-primed doors. You can get them pretty cheap at Home Depot or Lowes. It might look like more work than just taking the old door off the hinges and slapping the hinges on a new door and hanging it, but you're actually MUCH more likely to get it right with pre-hung doors, especially if you're not an experienced carpenter.
Another thing that can totally change the impression a prospective buyer gets is landscaping. You don't have to spend thousands for a professional landscaping makeover. By trimming any overgrown shrubs, weeding, and making sure the grass is trimmed and edged, you can accomplish this for next to nothing (except a little sweat). If you want to spend a few hundred bucks on new mulch if needed, that might be worth it as well.
You can do all these things for very little money, and improve the first impression a lot. Check the other houses on your street also. You want to be one of the nicer ones, but you don't want to be so much nicer than the rest that you're out of place, because then whatever you've spent will be negated by the rest of the neighborhood, and you'll have wasted your time and your money.
Hey Dave,
All good advice, but I think I beat you to it. LOL! I actually do have experience hanging doors and using power tools. I bought 6 panel primed doors that do not have the holes cut (cheaper that way). Since the agent was here I have hung all new doors. It's really not that hard if you measure the original door to a T and make sure you cut right. Sand a little here and there and you should be good. But for someone who has never done it... yes, doors can be a real pain. Nothing in a house is ever really straight as it should be. Anyway, each door only cost $29 and new knobs were $8 each. Reused the hinges. I didn't even have to mess with the frames or trim. The reason I did that was because I have lived in places with 6 panel doors and without and there is just something classy about the 6 panel. I feel it gives more character. The old doors were just that... old.. flat... boring.
I have used a neutral beige color for the walls and a bright cream/eggshell color for the trim and doors. I've seen it used in the newer, more expensive apartment complexes with smaller spaces. This is a fairly small house so this color scheme works well. It makes it cozy without making it seem confined.
I layed down new linoleum (sp?) in the laundry room and kitchen. We are still working on the baseboards and quarter round. The house had carpet at one point, but we ripped it out (it was ugly) and it left a huge gap at the baseboards. We have lovely hard wood though so it was worth it.
Got a heck of a deal on mulch at Ohio Mulch (cheaper then Home Depot or Lowes). Took care of that. Bought some bright colored flowers/plants for cheap at Home Depot (got my doors there too). You have to love Home Depot! I love landscaping so my yard wasn't bad off to begin with. Spent some time hand digging the handful of dandelions that popped up (thanks to my annoying neighbor).
The majority of the homes in this area are outdated inside. The deco and style is just not what younger people are into. Unless you are going for that vintage look, but then you are probably looking for more of a Victorian style house. So i am hoping that the fresh new look will make this house stand out from the majority. There are a couple of houses that have been recently flipped in this area (I scoped them out) and they seem to have the same idea I do.
Jessica, you've received a lot of good advice already. Just be sure to not overdo. The doors were a borderline call. They probably won't recover their cost. Remember that this is not going to be your home so you don't need to put all the finest things in it. Repaint everything, use some contrasting colors on accent walls and trim. Use caution, use pastels and ask for advice if your not an expert at this. You can do more harm than good. Put a good polish on the hardwood floors or refinish if necessary. Fix all minor problems. Clean, clean, clean and clean some more. Remove all personal items,stage with your best furniture. Use smaller tables. beds, couches etc. to make the rooms seem as big as possible.Keep furniture to a minimum, again to maximize the room size. Minor landscaping was already mentioned so always keep that first impression in mind. Try to market this before school starts again after summer vacation, so time is of the essence. I would also get more than one Realtors opinion on price. Make them give you a comparative market analysis to base your selling price on. Good luck, Jim
Thanks Jim. You are right. I am no expert and I may tend to get carried away when I am excited about a project. There are a LOT of houses for sale around here. Competition is stiff. I am a bit concerned about the amount of competition here. That's why I am putting so much effort into it I suppose. I don't have a ton of money though so you don't have to worry about me doing anything too drastic.
But hey, that's why I am here after all. To get opinions and ideas and make sure I don't screw it up.
Hopefully, you've already set a deadline for when you expect to have completed the rehab. Have you had a recent appraisal and/or BPO? If not, then you should do that. You need to get an idea of what that property is worth now, and what it will be worth subject to the modifications that you intend to make. You need to determine now how much time and money to budget for this project so that you won't go over-budget, and so that you'll hopefully be able to lock-in your profit.
You also need to factor in the current market conditions into your planning. Do you know the current, median sales price in your area? Over the past 3-6 months, has the median sales price trended upward, downward, or sideways in your market? If downward, then by how much per month? You also need to get an idea of what the cumulative DOM, and it's trending. Also, you'll need to price your property aggressively if you intend for it to sell quickly, and determine how much work can you afford to do to profit from or at least break even on this transaction.
Thanks Dory! I have not got a appraisal/BPO yet. We only had the real estate agent come out. I had suggested an appraisal to my parents, but they never did it. I think I will just have it done myself. Oh I know what it was... my parents said something about once you get the appraisal, they might raise your taxes on the property. So they didn't want to. Does that sound right? I think they were more concerned for the long term if the home doesn't sell for a long time.
The agent suggested we list the house for $103,900. The lower end homes about 4 or 5 blocks away don't go below $78,000. In a 3 to 4 block radius, we would be the cheapest list price. The higher end homes of similar make/age on this street and surrounding have been up around $115,000. For this particular area (a 2 block radius) seems to be a certain calibur of homes. Our home is in that calibur, but is one of the smallest homes in this area. So with our upgrades and size... that's how they chose that range.
I also noticed that nearly all the other homes in a 2 or 3 block radius were pricing quite a bit higher then what the auditor listed their home's value. Probably upwards of $10,000 more on some.
The auditor's current value is listed at $104,000 (it has increased over the last 4 to 5 months by about $300 to $500... can't remember exactly) and the last time anyone was in here to place a value on it was in 2002. We have since updated a lot of things. I personally think the value of this home should be more, but without that appraisal, I can't be too sure. Since I am no expert.
I haven't compared sale prices for several months so I will have to do that again.
Sorry if this is a silly questions, but what is "cumulative DOM"?
Originally posted by Jessica Bolin:
Scratch that sentence. I was thinking of something else. Auditors value has not increased. It's still the same. :wink:
DOM means Days On Market. I'm guessing cumulative DOM must mean it's been listed and then re-listed, or the listing price changed?
Ohhhh... yes! Ok thanks!
Originally posted by Dave V.:
Yes, it's basically the total number of days on market that a property has been (re-)listed. Some sellers think that they can game the system by re-listing their properties with other agents, because the DOM resets to 0 whenever a seller re-lists with another agent. Yet, the cumulative DOM doesn't reset.
Another way to track similar information is via the expired listings.
Hey Jessica,
I know yours is an older post... Just wanted to see how your project came out. Sounds like you put a lot of time and sweat into it! Look forward to hearing!