How much to fix up an old house?

[stepford]

I've lived for the past 30 years in a little "crapbox" - 1200 sqft starter home. Since DW and I never reproduced it's been big enough (barely) and we've never gotten around to moving. Now that I'm retired and DW's part time commitments at the local college are winding down we will soon be untethered to this area and will sell the old place and find a nicer "forever" house somewhere else.

Here's the thing. We're lazy and haven't really kept the house up to date. We've done a few "functional" remodels over the years (new flooring, lighting, windows, regular repainting) but the kitchen and bathrooms are very dated and the roof is 30+ years old. So we could easily spend $60-80K or more on remodeling / deferred maintenance.

The question is: should we?

Realtors always tell you to do all that stuff to maximize your selling price, but their advice is hardly impartial. If the cost of the work is anywhere close to the change in selling price I'd be strongly tempted to just sell as is.

We live in one of the cheapest neighborhoods in a "desirable" high COL area and Ive seen houses more beat up than ours sell quickly if priced a few 10s of $K less than comps. I have little doubt that our place will sell if priced similarly aggressively (though it may make our neighbors hate us).


So again, I'm tempted to just sell as is. Is that a bad idea?

 

[ShokWaveRider]

Even when a home seems perfect for you, someone will want to put their own stamp on it, and will find a lot to winge about it. Just look at House Hunters on HGTV.

I would sell as it is, with a few bucks off to give the buyers some money to work with on upgrades.

 

[samm]

Even when a home seems perfect for you, someone will want to put their own stamp on it, and will find a lot to winge about it. Just look at House Hunters on HGTV.

I would sell as it is, with a few bucks off to give the buyers some money to work with on upgrades.

+1
The buyers will have their own ideas and more motivated by lower price.

 

[brett]

Sell. Find your 'perfect' home.

There are two challenges with 'fixing up' an old house.

The first is knowing when to stop. Each time you remodel, some other part will scream for similar treatment. You can end up spending far more that you would ever realize from a subsequent sale.

The second is dealing with contractors and subK's. You will go over budget, over the quoted price and you still may not be happy with the work.

Put your house up for sale. Start looking. If you sell, take the cash. Even if it means you have to locate into a short term rental. Take your time to buy your next home. When you start a reno the end point in terms of dollars spent can be an unknown. Not so when you buy a home that meets your requirements.

We sold our family home eight years ago. It needed a kitchen remodel, four bathroom upgrades, 70-80K worth of windows, new flooring, and a cedar shake roof. High end area. We did the math...and walked. Good job, because the new owner spent a packet on a complete remodel....then the market collapsed.

Best thing we ever did was unload the house and walk away with the cash.
'

 

[WyomingLife]

This question is almost impossible to answer in the abstract, as it depends upon a host of neighborhood-, location- and personal-specific metrics.

You have indicated that you are not DIY'ers or enjoy home improvement activities via contractors, so that probably answers it right there.

My wife and I are serious DIY'ers. We always purchased the worst house in the best area, fixed it up largely with our own labor (as we love doing so and are reasonably skilled -- indeed, doing such work is our shared hobby), then generally made a killing on resale. DW has a master's degree in a financial field, but in reality is a master carpenter. She makes furniture, cabinets, you name it. I do ironwork, electrical, plumbing and other stuff. We love it.

We have done so in HCOL and LCOL.

It is also true that most homeowners expect a home to be in a certain condition, so I think the realtors are correct. So if you made some improvements you would likely (but not always -- as location matters) get your money back, plus some.

If you don't make some improvements, you will be trying to sell your house to somebody like DW and me. We will low-ball you, as we know precisely how much effort is required to improve a home. So go ahead and list it "as is," but don't expect it to sell for much as it could, even in HCOL (in my experience). Many homeowners (and thus buyers) don't enjoy working on old homes, it seems. Folks just want to move in. So if your house is a "project," your pool of buyers will be diminished.

 

[pacergal]

I wouldn't worry about what the neighbors think. If by selling a bit lower, you still get the $ you want, thats your decision.
You could have a realtor do a walk through and see what they say. Do nothing, sell for $XX, or
update and spend $, sell for $XXX.
Again, your choice. Depends on how fast you want to get out, at what cost (money, labor, time) to you and what you need/want for your next house purchase.

 

[OldShooter]

... So again, I'm tempted to just sell as is. Is that a bad idea?

No. I would price it fairly aggressively (high) and have the mindset that "we are not in a hurry." Also pound this mindset into the realtor's head if you are not FSBO. Realtors hate this because their goal is fast turnover and fast commission checks. Don't tell the realtor, but internally set an "acceptable offer" price that you will not go below. In a hot market this acceptable offer price may be full price.

Negotiating 101: He who is in a hurry loses.

Cut the price when you have become convinced that the asking price is too high. This may take weeks or months. Do not cut it just because you get an immediate lowball offer. The way I deal with lowballs is this: "I have set my price based on what I think is a fair market price. But I do intend to sell, so if you want a lower price please check back in a few weeks. Possibly by then I will have changed my expectations." That is not adversarial or insulting and it has a good chance of immediately eliciting an acceptable offer if the potential buyer likes the house.

 

[pjigar]

Price it lower than market and fix cosmetic stuff. Pricing higher generally doesn't work in our area because house goes in the "stale bucket" once the existing buyer pool rejects the house. The people just ignore stale house thinking there is something wrong with the house. Just my two cents.

 

[Beach Gal]

I faced this same dilemma when it came time to sell our house. I had fixed up the bathrooms but the kitchen was dated. It had the origional Formica countertops, orange colored wood cabinets, dated tile flooring etc. We decided to not invest in a total kitchen remodel and put the house on the market with the kitchen as is. Result? The house sold in 9 days for more money than we were expecting to get. The family that bought the house chose ours because they wanted a large home without a pool in the neighborhood and ours was the only one like that on the market. In our case, we saved money and avoided the hassle of a remodel.
Our realtor also said buyers may not like the selections you make when you do a remodel. Some buyers prefer white cabinets, others dark. Some like wood floors others tile. So even if you remodel it may not appeal to all buyers. Dated kitchens and bathrooms give the buyer an opportunity to update to their tastes and make it their own.

 

[skipro33]

Unless you can do all the labor yourself, or find it cheap, just sell as-is. Otherwise, treat it as a flip; buy a house, fix up and resell at a profit. Plenty of flipping house shows to give you an idea of what makes a house sell faster and higher.

 

[W2R]

Realtors always tell you to do all that stuff to maximize your selling price,

Not necessarily! If you are in a hot "seller's market", your realtor might tell you to put it on the market as is, ASAP. Mine did, anyway, when I sold my former home. It only took 4 days to sell it for the asking price (which was fairly high IMO), despite the fact that I really had not done much to prepare it for sale. Hot market.

Unless you are in a buyer's market, I'd sell it as is. No reason to do much to it unless it is unliveable. Any cosmetic changes would be to your taste, and the buyers may have a completely different idea of what looks good.

 

[Aerides]

I'd only fix what's needed to pass inspection - your market probably has flippers ready to pounce.

 

[Rustic23]

Every house, and market is different. Example, SIL lives in a home built in the 30's. The value is 1.2M. No amount of fix up will increase the value of the home, because it is going to be torn down. 1.2m is land value. Our neighbors, on the other hand have been trying to sell their lake home for two years. The home is priced right, however, the cove that gives the home lake access is blocked with logs and debris. It will cost in excess of 15k to dredge it. Buyers can't see past this not being a yearly occurrence. Thus the home still sits. Even lowering the price has not worked.

 

[finnski1]

I've lived for the past 30 years in a little "crapbox" - 1200 sqft starter home. Since DW and I never reproduced it's been big enough (barely) and we've never gotten around to moving. Now that I'm retired and DW's part time commitments at the local college are winding down we will soon be untethered to this area and will sell the old place and find a nicer "forever" house somewhere else.

Here's the thing. We're lazy and haven't really kept the house up to date. We've done a few "functional" remodels over the years (new flooring, lighting, windows, regular repainting) but the kitchen and bathrooms are very dated and the roof is 30+ years old. So we could easily spend $60-80K or more on remodeling / deferred maintenance.

The question is: should we?

Realtors always tell you to do all that stuff to maximize your selling price, but their advice is hardly impartial. If the cost of the work is anywhere close to the change in selling price I'd be strongly tempted to just sell as is.

We live in one of the cheapest neighborhoods in a "desirable" high COL area and Ive seen houses more beat up than ours sell quickly if priced a few 10s of $K less than comps. I have little doubt that our place will sell if priced similarly aggressively (though it may make our neighbors hate us).


So again, I'm tempted to just sell as is. Is that a bad idea?

If you look at all the articles about the best home improvement projects for ROI, they almost always show returns below 100% and tout those as a good idea?
If for example you spend $20,000 updating your kitchen you can get back $18000 back when you sell. Never made much sense to me.
I would sell as is and move on.

 

[2017ish]

Our relevant experience has mainly been from the buying side. Seemingly innumerable houses that we looked at both when younger and in our late 40s had been "rehabbed." The problem generally was that the seller wanted to recoup their expenses, while we wanted to pay less because of the cost of ripping out their "improvements."

 

[savory]

There has only been one mention of selling by owner. I do not know if the business model we used is available everywhere but we used a flat rate broker. I think we paid $500 which got us on the multi-listing and some guidance . You may want to investigate that opportunity to reduce your selling expenses.

 

[JRon]

Could you leave the interior as is, but fix the roof and do any needed updates to furnace, A/C, water heater, etc? That way the buyer sees the basics have been taken care of, but gets to do the finishes the way they want them. If there's too many problems, buyer may wonder what else is wrong they can't see.

 

[RobbieB]

I would spend dough to improve if you wanted to keep the house. To sell I would spend just enough to spiffy any "uglies" and no more. Like fresh paint and a new carpet if worn out.

 

[jollystomper]

Could you leave the interior as is, but fix the roof and do any needed updates to furnace, A/C, water heater, etc? That way the buyer sees the basics have been taken care of, but gets to do the finishes the way they want them. If there's too many problems, buyer may wonder what else is wrong they can't see.

I was thinking along this time as well. I would have the roof checked and repair and replace it. If the "core" items like furnance/heat pump/AC (whatever you are using) and water heater are working and still have maybe half of their expected life left, that would be okay.

Beyond that I would just (if you have not) de-clutter and not make do any "cosmetic" remodeling. Of course, if you are in a hot market, you likely will not have to do anything.

 

[RobbieB]

Water heater? I have replaced many water heaters when leaking or not firing anymore. They looked as good as they did when new, just didn't work anymore.

 

[latexman]

Could you leave the interior as is, but fix the roof and do any needed updates to furnace, A/C, water heater, etc? That way the buyer sees the basics have been taken care of, but gets to do the finishes the way they want them. If there's too many problems, buyer may wonder what else is wrong they can't see.

According to Remodeling Magazine’s 2013 Cost vs. Value Report, homeowners who have new roofing installed can expect to recover an average of 62.9% of the installation cost through increased home value.

So, if you want to give the new buyer 37% of the cost of the new roof, go ahead. Not me. Sell as-is.

You can look up the resale value of a new furnace, A/C, and water heater, but expect similar results, expecially if it's not DIY.

 

[RobbieB]

Yup, I agree. Even if the roof needs replacement, you go and put on shingles and the buyer really wants shake or metal. I would do improvements after a signed contract that the buyer wanted, but not before.

 

[stepford]

As it turns out we had the water heater replaced in January (when COVID and worries about plumbers in our house were just over the horizon). Furnace was replaced when we had central A/C installed about 15 years ago. This is getting up toward the mean service lifetime I guess, but it works fine and we have no intention of replacing before sale.

Thanks for all your input - and confirming my cheapskate low-hassle philosophy.

 

[Koolau]

If you fix up current house, will you live there until it is finished/sold and THEN buy your new house? If so, this tips the scale a bit toward remodeling (from a financial standpoint - not from a PITA standpoint.) Of course balancing the savings of owning only one house at a time is that you may need to rent for a while after sale of old place unless you find dream home right away.

If you buy new and still have the old to fix up, then as is, priced right, will prevent you from having two houses (with associated costs) at the same time. That is, if the old sells (that's why I say "priced right.")

We bought the new place, fixed up the old place (more cosmetic than anything else but extensive). It took a couple of months with one handy man that we knew. Monthly costs (like HOA dues, taxes, falling market (at that time)) cost us a fair amount.

We are big believers in move-in-ready which is how we sold the place. I'm not sure we made the costs back, but the sale was virtually instantaneous even in a falling market. SO, difficult to say, but NOW I lean toward "as is" sale if willing to price it right. It should also reduce the stress involved, but YMMV.

 

[Sunset]

I made the mistake of fixing up a house, painting most of it, fixing things, renovating the kitchen.
It looked nice.
House sold for less than it would have earlier in the time it took to renovate.
Buy put in a tenant.
Two years later the house was on the market again, and I saw the new owner had renovated the kitchen again!! and renovated the bathroom.

Next time, I'm selling as is with $$$ for their own renovations.