How much to fix up an old house?

[Doribe]

I would avoid the words "as-is" at all costs. The term means, to some, that it's not ready to move-into. It's just an invitation for low ballers to waste your time.

What I would do in your case is spend just enough to make it "move-in ready". And to do that, I'd get an inspector and fix everything that would prevent the buyers from securing a loan, for sure. So get all the rotted wood bondo'd and if it needs paint, paint it (inside and out). Make sure everything works. Make sure everything is clean. If some things are marginal, for instance carpet that's going to need to be replaced for sure, you can call it out yourself before the offer is made by putting a small allowance in the deal ("$500 carpet allowance"). If you didn't do these things, you put your house in a "dump" category and can expect a lot lower offers (unless you're in a hot market, where the houses like yours have been flipped with new countertops for megabucks). But if that's the case, you might consider a significant face-lift yourself and not letting the flipper have the money.

I have to disagree with your "as-is" idea. As-is does not designate the house as a dump, especially with old houses. It gives protection during the negotiation phase. Without as-is there would be no end to requests by buyers with an old house. In an area with 100+ year old houses as-is is the norm. As-is also protects the seller against litigation for problems found later.

I believe in using the disclosure form to point out any know defects, so the buyer can make an offer based on good information. If the buyer hires an inspector and finds other (non-major) problems, I will stand firm on the negotiations.

The property has to look good and be move in ready in order to have the best chance to sell. Spend money on paint and fix anything that makes the place look neglected.

 

[travelover]

Septic and wells inspections are commonly required by law before a property can be sold. In my experience the septic inspector and the regional supplier/contractor was one and the same.

In this case, there was no conflict of interest, just bad advice from the real estate agent. If I'd found the system was bad when I was about to list it, I could have competitively bid the job and done it before the ground was frozen.

 

[sengsational]

I have to disagree with your "as-is" idea. As-is does not designate the house as a dump, especially with old houses. It gives protection during the negotiation phase. Without as-is there would be no end to requests by buyers with an old house. In an area with 100+ year old houses as-is is the norm. As-is also protects the seller against litigation for problems found later.

I believe in using the disclosure form to point out any know defects, so the buyer can make an offer based on good information. If the buyer hires an inspector and finds other (non-major) problems, I will stand firm on the negotiations.

The property has to look good and be move in ready in order to have the best chance to sell. Spend money on paint and fix anything that makes the place look neglected.

I think we are in general agreement with our advice for someone in the OP's position; if it's marketed as move-in ready with call outs for imperfections so as to set expectations that their inspector will certainly find things that will not be adjusted for, that's what I'd go for. I've found that even putting the words "as is" into the deal doesn't keep the buyers from asking to have things fixed. Of course you can point to the words and say "your offer was made on the property described as being sold as-is", and that's helpful, but if their expectations of minimal defects are dashed by a horrible inspection report, the words won't keep them from walking away. The best of both worlds is to make the buyers aware by gently introducing the idea, before they make the offer, that you have had your own inspection and there are non-essential things that you will not be fixing. In my experience, buyers should know that things like window screens and grandfathered building code violations, old but working mechanicals, and stuff like that should be "off the table" in the negotiations.

 

[ivinsfan]

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

Yes but in a older home be prepared for surprises as to what this might cost...and as far as fixing it, just give the buyer a reasonable credit and let them worry about the fixing.

 

[Doribe]

I think we are in general agreement with our advice for someone in the OP's position; if it's marketed as move-in ready with call outs for imperfections so as to set expectations that their inspector will certainly find things that will not be adjusted for, that's what I'd go for. I've found that even putting the words "as is" into the deal doesn't keep the buyers from asking to have things fixed. Of course you can point to the words and say "your offer was made on the property described as being sold as-is", and that's helpful, but if their expectations of minimal defects are dashed by a horrible inspection report, the words won't keep them from walking away. The best of both worlds is to make the buyers aware by gently introducing the idea, before they make the offer, that you have had your own inspection and there are non-essential things that you will not be fixing. In my experience, buyers should know that things like window screens and grandfathered building code violations, old but working mechanicals, and stuff like that should be "off the table" in the negotiations.

Agree

 

[Morgan22]

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.

+1

 

[RenoJay]

I’d probably list it as is hoping to attract a buyer who wants to remodel it to their own taste. If you don’t get any bites, then you can remodel and try again. (But get opinions from Millennials. I was recently schooled that my preferences for brown cabinets and a pot rack in the kitchen are far out of date!)

 

[Scrapr]

I’d probably list it as is hoping to attract a buyer who wants to remodel it to their own taste. If you don’t get any bites, then you can remodel and try again. (But get opinions from Millennials. I was recently schooled that my preferences for brown cabinets and a pot rack in the kitchen are far out of date!)

Sheesh..I suppose they didn't like the brass accents? Yeah, i think anything brown has got to go. Just watch Chip & Joanna and you will be right in the target market

 

[imnontrad]

Talk to an experienced house appraiser. Find out what it is worth as is and what it would be worth if updated. Ensure you add in the cost for you living somewhere else while renovations are going on (and put in a ~10% hedge for unseen problems). If the value is significantly higher than the renovation costs, then go for it. If not, advertise it as is and, if a good deal some real estate flipper/investor might snap it up.

 

[bcbix001]

Real Estate is local. It sounds like you have not paid much attention to the local market and are looking from free advice from a national (or broader forum). Based on your track record of not maintaining / updating your house, this is neither your strength or interest. If you have adequate resources without using the house as a final boost to your portfolio, do not try to maximize it now. My DW also hated upgrades just before selling... she wished she could have enjoyed the new stuff for a year or two. My free advice, is get a good inspection, research 2 or 3 realtors and get market assessments and fix up advice from them relative to the local market. If you want or need top dollar, you may need to work for it... if that does not interest you, set a realistic price and be prepared to be flexible.

 

[kgtest]

Real Estate is local. It sounds like you have not paid much attention to the local market and are looking from free advice from a national (or broader forum). Based on your track record of not maintaining / updating your house, this is neither your strength or interest. If you have adequate resources without using the house as a final boost to your portfolio, do not try to maximize it now. My DW also hated upgrades just before selling... she wished she could have enjoyed the new stuff for a year or two. My free advice, is get a good inspection, research 2 or 3 realtors and get market assessments and fix up advice from them relative to the local market. If you want or need top dollar, you may need to work for it... if that does not interest you, set a realistic price and be prepared to be flexible.

Good inspection...but heck, let the buyer do that. If they find something they don't like negotiate it. Inspections are fairly inexpensive for that size home. I still have things inspector found that I deemed more important and still haven't fixed after moving in 7 years ago.

I've always had clean, respectable and maintained properties when I sold them. Did replace a roof and sold 2 years later which I kinda regretted but the roof was only like $7,000 to replace so not too bad.

Realtors are a dime a dozen, some give sage advice, some give trainwreck advice. I've had ok and not so ok. Same with inspectors. YMMV
''

Great starter home in great neighborhood. Seems like a good listing title to me. Price it accordingly and it will sell.

 

[shafer9]

How much can you get for it now? How much could you get if you do $80k in renovations?

Answer that and you have your solution. My gut says, don't bother.

Get painters and carpenters in to do not-expensive cosmetic work and leave it. Hire someone to stage it. Then move on.

If you can make $100k in profit, might be worth it. But that's a lot of plaster dust and PIA stuff. Up to you.

 

[CCdaCE]

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?

Like others have said, if it's a hot market, sell!

Seems like that's the case in the midwest, anyway.

We moved into our "starter home" in '03. Bought it for under $120k - some goofy number 115.9k?

After several years and a couple kids, Wife wasn't happy with all it's imperfections of a house built in '49, flooded and main level redone (cheaply) in '97, and a basement that leaked every spring, sometimes for a day, sometimes two weeks. So, I installed 2 exterior doors, she had it painted, we had it shingled 4 years before we sold, and hired acquaintances to paint the exterior, family and I redid the upstairs bathroom. Maybe a grand total of $8-9k of improvements for the 9 years we lived there. I think we paid around $300/mo. to heat it in the dead of winter after I blew over a foot of insulation into the attic. So, it needed windows, and foundation work to seal the cracks and deal with the water. Both our neighbors had a sump pump, our house didn't. I think the realtor suggested listing for $155k. I said 157k. Got 5 showings in 12 hrs., 3 offers, 1 cash, and Sold! for 161k the day after listing. That guy/family only lived there 14 mos. while his new house was being built on the golf course.

The first thing the new owners did was repaint the inside - so, $1200 of our money "wasted", and put in a new A/C and possibly a furnace. At some point it got new windows and a sump pump and they addressed the foundation by digging a lot of it up, I noticed. The assessment went up about $50k. In the mean time, the next house we moved into has gone up about $60k or more and we haven't done anything to it. Never know until you try to sell.

So, I/we fixed the cheap/minimum things to maintain and make it sellable, and let them buy the big dollar items like windows and major foundation repair (it was just hairline cracks letting the water in, but, it seems to me that any foundation repair is major).

I guess if your target audience is flippers, leave it as is. If your target audience is "starter home" people that want move-in-ready, I wouldn't do it any different than what we did. Make it livable and let them buy the major upgrades.

Maybe my late reply is a decision that already has been made, but this topic entertains me.

-CC

 

[Philliefan33]

To pile on the late answers, here is what is happening to us right now:

Renters moved out of our townhouse on Aug. 30. We dithered a bit with fixing it up because we had other fun things to do and had some interest from someone with a tight budget (so wouldn’t be able to pay for any improvements we might do). By the end of September that deal wasn’t happening so we were moving forward with improvements we believed would be necessary. We got an estimate from our “guy” to redo two upstairs bathrooms and a few small items. I started painting everything.

Before signing the contract with the contractor we decided to bring in a real estate agent for advice. She told us to not bother rehab in the bathrooms— just refinish one tub, clean and paint. We also replaced the stained ceiling tiles in a finished basement area and replaced yellowed vinyl flooring in that area with carpet (her suggestion). I finished painting the interior.

The house was listed as “coming soon” for about two weeks while we finished our tasks. It went on the market yesterday at 3:30 pm. Then the craziness started: five showings last night, six scheduled for today and three so far for the weekend.

At the advice of our agent we specified that we will look at all offers received by Sunday afternoon. DH plays pickleball with a different realtor who showed our house last night and her client plans to submit an offer.

We only need one acceptable offer. We are shocked at the interest (if showings indicate interest). It certainly feels like a seller’s market here in the Philadelphia suburbs.

 

[pb4uski]

...My free advice, is get a good inspection ...

NO!

In my area it is recommended that sellers NOT get a property inspection... because if you do and become aware of flaws in the property that you were previously unaware of, you may need to disclose them to the buyer and in some cases where it would be dangerous, fix it. If the buyer finds out that you were aware of some major flaw and did not disclose it in the property information report then they can come back at you.

OTOH, if you are unaware and fail to disclose then you're ok.

In our parts, it is up to the buyer to have an inspection done as part of their due diligence.

Sometimes, ignorance is bilss.

 

[ivinsfan]

NO!

In my area it is recommended that sellers NOT get a property inspection... because if you do and become aware of flaws in the property that you were previously unaware of, you may need to disclose them to the buyer and in some cases where it would be dangerous, fix it. If the buyer finds out that you were aware of some major flaw and did not disclose it in the property information report then they can come back at you.

OTOH, if you are unaware and fail to disclose then you're ok.

In our parts, it is up to the buyer to have an inspection done as part of their due diligence.

Sometimes, ignorance is bilss.

Not sure that holds water in this day and age..I personally know of a couple of cases where the buyer has come back and sued the seller of monetary damages to fix a problem discovered after they moved in. Don't think it matters if the seller knew about it or not. When we were still acquiring farmland we bought 80 acres with a building site where we wanted to raise youngstock. Found out the well was really inoperable and needed to drill a new one. People told us to get a lawyer to ask the seller for the cost of the well and we would likely get that money back. We decided not to, because the guy was a neighbor and we wanted to buy more local land, didn't want to get a bad reputation.. FYI the well cost almost 6% of the cost of the property.

 

[travelover]

NO!

In my area it is recommended that sellers NOT get a property inspection... because if you do and become aware of flaws in the property that you were previously unaware of, you may need to disclose them to the buyer and in some cases where it would be dangerous, fix it. If the buyer finds out that you were aware of some major flaw and did not disclose it in the property information report then they can come back at you.

OTOH, if you are unaware and fail to disclose then you're ok.

In our parts, it is up to the buyer to have an inspection done as part of their due diligence.

Sometimes, ignorance is bilss.

You might have missed my earlier post where the real estate agent recommended I not get a septic inspection before I listed it and I ended up paying top buck to have a septic filed installed in the winter.

 

[finnski1]

You might have missed my earlier post where the real estate agent recommended I not get a septic inspection before I listed it and I ended up paying top buck to have a septic filed installed in the winter.

That still doesn't discount his reasoning. In my area as well it is generally up to the buyer to pay for an inspection. If they then find an issue such as needing a septic system you then negotiate who will pay for what.

If on the other hand you did the inspection and didn't disclose it needed a new septic as PB4uski mentioned then you open yourself up to liability issues. AT least that is how it is around here in NH.

 

[pb4uski]

Not sure that holds water in this day and age..I personally know of a couple of cases where the buyer has come back and sued the seller of monetary damages to fix a problem discovered after they moved in. Don't think it matters if the seller knew about it or not. When we were still acquiring farmland we bought 80 acres with a building site where we wanted to raise youngstock. Found out the well was really inoperable and needed to drill a new one. People told us to get a lawyer to ask the seller for the cost of the well and we would likely get that money back. We decided not to, because the guy was a neighbor and we wanted to buy more local land, didn't want to get a bad reputation.. FYI the well cost almost 6% of the cost of the property.

I disagree. To begin with, if someone feels aggrieved they can sue for anything... so they certainly can sue the seller whether the seller knew about it or not.

However, if during discovery the plantiffs find that the seller had a home inspection done that flagged a significant issue and that the seller failed to disclose it to the buyer, then the defendant is in a very vulnerable position.

On the other hand, if there is no evidence pointing to the seller having knowledge of the issue and the failed to disclose it then they are less vunerable... you can't reasonably be expected to disclose something that you are not aware of. Caveat emptor and all that.

You say that you know of "a couple of cases where the buyer has come back and sued the seller of monetary damages to fix a problem discovered after they moved in". What was the outcome of those cases? Was the seller aware of and failed to disclose the problems or were they unaware of the problems? If the seller was unaware of the problem so failed to disclose it and was later sued by the buyer and lost then you may have a point... otherwise you have no point at all because anybody can sue anybody.

 

[pb4uski]

I'm not a proponent of pouring money in before a resale, but I got screwed royal by bad advice from a real estate agent with respect to having the septic system inspected prior to sale. It was 50 years old and working, but I'd heard from neighbors that it might not pass the mandatory inspection.

Long story short, by the time it failed the inspection it was winter in Michigan, the sale was held up and I paid over $22K to have it replaced. So, for others in a similar situation, beware.

Septic and wells inspections are commonly required by law before a property can be sold. In my experience the septic inspector and the regional supplier/contractor was one and the same.

IF, and note that I said IF, certain inspections are mandatory before a property can be sold then that would seem to be a potential exception in that the seller would eventually be made aware of a flaw... it MAY be in the seller's best interest to have an inspection done for such mandatory items to get ahead of the problem.... but on the other hand, one inspector might note a flaw and another might not, especially if the nature of the item is highly judgemental.

At the same time, the situation Doribe decscribes is akin to having the fox guard the henhouse.

 

[travelover]

That still doesn't discount his reasoning. In my area as well it is generally up to the buyer to pay for an inspection. If they then find an issue such as needing a septic system you then negotiate who will pay for what. ..............

Exactly what the crooked real estate agent told me. "If it fails, I'll negotiate with the buyer to split the cost.". Then when it failed, he said , "You can't sell it without fixing it so you are on the hook for the full cost". And, yes, he denied ever saying any different.

Did I mention how much I dislike this agent?

 

[pb4uski]

Exactly what the crooked real estate agent told me. "If it fails, I'll negotiate with the buyer to split the cost.". Then when it failed, he said , "You can't sell it without fixing it so you are on the hook for the full cost". And, yes, he denied ever saying any different.

Did I mention how much I dislike this agent?

Sounds like BS to me.

While it might be true that you couldn't sell it without fixing it, it doesn't necessarily follow that you were on the hook for the full cost.... sellers often at least mentally increase their minimum sale price expectation for improvements that they have to make.. and you can then also legitimately claim that it has a new septic system... which presumably would command a higer price that the same property with an old but still functioning septic system ad at least recover some of your cost.

Would a buyer be willing to pay more for a house with a brand new driveway vs a 10 year old driveway?

Did he ever approach the buyers to negotiate a better price to reflect the better utility of the new septic system?

 

[ivinsfan]

I disagree. To begin with, if someone feels aggrieved they can sue for anything... so they certainly can sue the seller whether the seller knew about it or not.

However, if during discovery the plantiffs find that the seller had a home inspection done that flagged a significant issue and that the seller failed to disclose it to the buyer, then the defendant is in a very vulnerable position.

On the other hand, if there is no evidence pointing to the seller having knowledge of the issue and the failed to disclose it then they are less vunerable... you can't reasonably be expected to disclose something that you are not aware of. Caveat emptor and all that.

You say that you know of "a couple of cases where the buyer has come back and sued the seller of monetary damages to fix a problem discovered after they moved in". What was the outcome of those cases? Was the seller aware of and failed to disclose the problems or were they unaware of the problems? If the seller was unaware of the problem so failed to disclose it and was later sued by the buyer and lost then you may have a point... otherwise you have no point at all because anybody can sue anybody.

I actually know of three cases, it's rural so they involved two septic issues and a well issue.

One case I knew the seller, unimproved land sold for a building site. The perc test the buyer did showed he would have to put in a more expensive septic tank then normal to meet standards ..the seller got sued and payed the buyer the extra cost of the septic. Seller never ran a perc test so he had no idea it was an issue.

The well was similar to mine, buyer bought an older farm house and has low water pressure, usable but not to modern standards. The seller was fine with the water pressure, but the buyer sued saying they wanted a new well. Seller payed half the cost of a new well.

Third case is doozey, seller bought a little lake cabin, it was clearly listed as having a "shared" well. Due to lack of due diligence the buyer didn't realize until after closing that their water supply was really a hose connected to the next door property's well. Lawyers involved and the seller had to pay half the cost of a new well. PS, I know this person (buyer) and yes they are that dumb.

I actually know one party on each of these issues so it's not hearsay. I will mention that I used the word sued as a catchall, letters between lawyers on each side were exchanged, suits were threatened ,and some type of agreement was reached. Most of these settlements were in the range of maybe 10-15K. Total costs of the repairs/upgrades in the 20-30K area. So not minor enough for small claims and very expensive as far as actually taking to court,

 

[foxfirev5]

In today's market it may be better to sell as is. The market in most areas is hot while renovations and repair costs are skyrocketing. Purely anecdotal based on DS recent home selling.

 

[travelover]

Sounds like BS to me........

It sounds like you are calling me a liar. Discussion over.