Do You Know What Updates Will Cost When looking At Homes?

This question might seem trivial...but it could cost you thousands of dollars in negotiations and a home you settle for instead of the one you want. I show a lot of homes and have seen homes that need a complete makeover to ones that you could walk right in and never do a thing for the next ten years and probably everything in the middle. What gets me is when a Realtor tells me that their buyer chose another home because the cost to update was to much versus my house. Yet had no idea of what the cost of the update would really be.

I sold a house to a nice young family. When we looked at the house we were comparing it with a house that someone had renovated a few houses down. The first house needed new appliances, counter tops, carpet, paint, and a kitchen floor. All these items were done in the other house. The price difference was a good difference apart. I advised my clients that we should measure the rooms and counter tops and check to see what it would cost to put what the other house had in it in this house. Paint is relatively inexpensive so that was easy to add to the cost.

In the process of me getting them some quotes to duplicate the counter tops in the other house and the flooring and them shopping the price of appliances around the makeover house sold. We gathered our numbers and made an offer on the other house based on what it needed. Converted the loan to a rehabilitation loan (which allowed us to roll in the cost of the repairs and work into the loan). Agreed to acceptable terms and came out after all the work was done 15% LESS than the other house.

What made me write this today was I went and visited them this morning and they wanted to show off their new house with all the repairs done to it. They had become friendly with the neighbors who bought the other house. When the neighbors found out what they were doing and how much it cost...they were shocked. They said their Realtor told them the cost was to much and that the other house was a better buy. Then I was talking with a Realtor whose client had narrowed their choices of houses down to 2 (one being mine) and said they went with the other house because the cost of updating was larger than the difference in price based on looking at it.

Not being a licensed contractor I am in no position to tell someone what is a better purchase in regards to buying something already done or one I can get to that shape. For some people they do not want to do anything but move right in. Others do not mind if they can save some money. Everyone needs are different....But are all your options explained to you and are you getting the right information before making a decision?

This one buyer paid 15% more for in essence the same house.... The one who bought the other house was priced $40,000 more than mine. My seller had received quotes on the updates at approximately $25,000 to $30,000 but since she was moving elected not to do them.... So, is the house all done really the best deal? Sometimes YES and sometimes NO.....

Dave diCecco
Realtor/Broker
www.davedicecco.com