Fixer Uppers - What Buyers and Sellers Should Know

Fixer Uppers - What Buyers and Sellers Should Know

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Fixer Uppers - What You Need to Know

[00:00:00] Hey real estate fans welcome back to another edition of the weekly podcast. I'm Alice Lema. I'm a broker in Southern Oregon at John L. Scott real estate. And today we're going to talk about fixer uppers. And the reason we're doing it now in part is because the market's starting to pick up a little bit and we are going to see more inventory, but we're still a little bit short.

And we do have a lot of estate sales entering the market. We have some foreclosures, but we will have short sales that is supposed to be a, you know, a part of our inventory. Nerd Wallet had a quote saying, buying a fixer upper can provide a path to home ownership for first time home buyers or a way for repeat buyers to afford larger home or a better neighborhood with relatively low inventory of homes for sale these days. A move in ready home can be hard to find, especially if you're on a budget. And all of that is true. And I would also throw in investors because investors sometimes can add [00:01:00] units or buy properties that are Not financeable and fix them up and create more units.

I do want to address sellers first, and I know that seems a little backwards, but hang in there because buyers, you should listen to this too. So on listing appointments, a lot of us agents get sellers that say, I want to sell as is, I don't want to do any repairs. I don't want to do any improvements and blah, blah, blah. And that's all fine. Especially if you're in a crisis situation, a divorce, a death, blah, A probate conservatorship or something like that. Or you just plain don't have the money. Then that is understandable. However, I do want to caution you sellers. You do lose more money, usually more money than it would cost to do the repairs. But if you just don't have the bandwidth, either financially, mentally, or otherwise, it's no problem. We do it, but I do want you to seriously consider doing a full home [00:02:00] inspection.

And giving that to the buyer the buyer's agent or the buyer, whoever you're dealing with and give it to them up front so that when they write their offer, they know what they're getting into. And you do need to do a discount because that's the carrot to dangle. It can also take longer, having the home inspection up front will shorten the time that it takes for a buyer to write an offer. But it's going to be longer than if you dolled it all up. Okay. But it is doable.

So let's talk to buyers. So buyers, this is fun for some people and not fun for others. And that is the caution for doing construction or rehabilitation or something like that. It doesn't always go well, and it's not always our fault. It is the supply chain still or the expensive supply chain and we're starting to suspect that there's like surge pricing happening now with the big box [00:03:00] stores and the bigger suppliers, but that's a different podcast. So the amount of money it takes to To do your project when you close escrow versus what you thought it was going to be 30 days before can sometimes be different.

It is also hard to find quality contractors, because at least in southern Oregon right now there's a zillion projects going on. And it's really better for those construction workers and their families if they have a steady gig and we're just the onesie twosies so you just got to have that in your head, but Here's the advantage. If you can stomach all that chaos, then you really can get a much better home, better neighborhood, bigger, whatever, more parking, more room for toys. Maybe a swimming pool because some of those rehab loans will actually pay to put in a pool. And then you get the house you wanted, but you do have to suffer, suffer through the whole process.[00:04:00]

Count on not moving in for 30 to 90 days. We can usually get everything done by then, at least we're supposed to. But you will, You will probably add on to your loan, 1, 500, 150, 000. So don't let those numbers scare you. If you want to do something like this, or you've got family members, especially older people, if you want to help the youngers get into a property and you want to talk to them about this, just get me on the phone. I do family meetings all the time.

The most common improvements I think are going to surprise you. The most common improvements that give the most bang for the buck and are the most requested from buyers are flooring. They want all the flooring to be the same. They don't want carpet. If there is carpet, only in the bedrooms. And now carpet, again, this is like surge pricing effects. Carpet is way lower cost than vinyl planks. So but they just [00:05:00] want that continuous monochromatic look. So flooring, countertops and fixtures. Well, you would think that that's not such a big deal. That's not major surgery. We haven't moved any walls and we're probably painting the cabinets instead of replacing them.

But do you know that can still be another 70, 000. To 90, 000 depending on the quality and the scarcity of the flooring and the counters you're putting in and the price of the fixtures. But it really does make a big difference. So, if you have a lot of square footage, then you're going to want to budget higher or if you're doing very expensive counters, very expensive fixtures and maybe real wood floors. A lot of us are just doing vinyl plank flooring. We're doing some kind of continuous counter, possibly resin like corian or quartz, granite. The price of granite has gone down [00:06:00] because people are are moving towards something else. And then so yeah, you just got to watch watch your prices and make sure that when you go to pick them up or run the credit card, that it is what you, you said it was what they said it was not you.

So, so do plan on a budget. And add a little more. And if you are doing a renovation loan, then we really should talk ahead of time. There's not very many loan companies that do them. And there's not very many of the ones that do them, that do them well. And again, the real estate agents really know who's who.

So let's definitely have that conversation. So having said that, if you're a buyer I know it's hard to save up that down payment and go through all the rigmarole war just to get pre qualified and now Alice is saying now you got to wait 30 to 90 days to even move in for all the work to be done.

But again, if you could [00:07:00] stomach that whole process, you really might be better off, and the house might be worth more. Because we're, we possibly are going into a slightly up market. It might be worth a little extra percentage points because you did the improvement. Going back to sellers. If you can do this kind of rehab before selling, that's great.

And if you can't, don't worry about it. A lot of us agents, especially people like me that do construction, we know who buys these and who fixes them up and we know why and we know how much money they can spend. So, we can certainly shortcut the process for you, but I just, you know, like you to have the reality of the situation.

So if there is a way for sellers to do some improvements that that you think about that. Okay. So that's the fixer upper podcast, what buyers and sellers need to consider. I'd like you to consider me as your agent. I want you to call me, text me 541-301-7980 call me [00:08:00] tex meg.

Also, please subscribe to the channel. We would love to see that magic 1, 001 subscribers on YouTube. But right now we're just pleased as punch to have the people we have, also just a reminder, jump on the market stats this week. That podcast has some super exciting news. And we're going to watch all three counties carefully.

Additionally, the radio show was great this week. It's great every week. I don't mean to say it like that, that we had another Alice from Jim septic on, very technical, very funny, lady co owner of Jim septic. And I thought I knew a lot about septic because as a lot of you followers know, I love talking about septics. But she brought to mind many, many new points. So it's definitely worth clicking on the radio show episode, have a great Southern Oregon weekend, hug those you love, and we'll see you next time. Bye now.

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