Tag: repairs

What’s up with Cosmetic Fixers?

Posted on by Mel Marzahl

 

What’s up with cosmetic fixers? What are they? What’s the difference between a “fixer” and a “cosmetic fixer”? Here is a quick guide to cosmetic fixers. I’ll answer these questions and talk a bit about how buying one could be the best way to get into a busy market and what to look for.

What are they?

First, let me explain what I mean by a “cosmetic fixer”. These are homes that structurally and mechanically are in good shape but look outdated, dirty, or generally unattractive. Cosmetic fixers can be condos, townhouses, single-family or multi-family homes.

What’s the difference between a “fixer” and a “cosmetic fixer”?

In short, a fixer is a property that needs A LOT of work and may not even be livable (lacking heat, missing flooring, open walls, mold/mildew, etc). They are priced significantly under the average price for a similar property in the same area that is “move-in ready”. Fixers often require cash to purchase the home as lenders may not provide financing for them. A cosmetic fixer is a home that has “good bones” meaning its main systems are functioning well and it’s livable, but it may need a deep clean and some minor t0 significant updates to the cosmetics. Cosmetic updates might include things like carpet, paint, countertops, cabinetry, fixtures, tile, and the list goes on… It can also generally be financed as well because while it may need a deep clean and updating it is still in liveable condition.

What to look for

If you’re looking for a cosmetic fixer, you will need to look past a home’s popcorn ceilings, chipping vinyl floors, or dirty, threadbare carpeting and take a good look at the functional aspects of the home. The structural components of the home, like the roof, gutters, siding, windows, and doors should be in generally good to average condition. The mechanical components of the home, like the furnace, ac, plumbing, electrical panel, and ventilation should also be in good to average condition. Your realtor can point out things to take note of and share their experiences, but you should always rely on the expertise of a home inspector and/or trusted contractors to verify the condition.

Is a cosmetic fixer right for my budget?

Whether you are a first-time buyer looking to get into the market, someone looking to buy a second home, or an experienced investor, there are some things to consider first. Mainly, does your budget allow you to make the needed repairs? If you’re getting a loan to buy the house, you’ll want to look at the funds you have available after your downpayment and closing costs. Do you have enough money to make the repairs you want to do? How big is the home?

If you only have enough to cover new paint, some new hardware for cabinets, and an appliance or two, maybe a “light” cosmetic fixer or a more modest-sized home is best. If you have enough cash to replace all the cabinetry, re-do the bathrooms, replace light fixtures and flooring, you’ll have more options.

A way to stretch your budget as a first-time buyer, or someone who intends to live in the home as they fix it up, is to prioritize your repairs. Decide what needs fixing or replacing before you move in, what items you can do in the first year, and what things you can live with for a few years while you save up for the next project. Does the carpet need replacing or does the asbestos popcorn ceiling need to be removed? You might decide to do these items before you move all your stuff in and live with the 1970s kitchen for a while. If you go this route, keep in mind that you’ll also have regular home maintenance things to budget for as well. You may be saving for a new bathroom, but don’t forget to put a few dollars away to re-caulk and touch up paint the exterior next fall or to have your ac and furnace serviced regularly.

Is buying a cosmetic fixer right for me?

Well, if you’ve read this far, I think it could be! Deciding to buy a cosmetic fixer means that you have the vision for what a home could be with some TLC. It also means that you’re committing to a bit of a project. Cosmetic fixers can work for many types of buyers. Maybe you’re handy, you like a DIY project and plan to live in the home as you fix it up. Or maybe you’re planning to hire someone to do all the updates right away so you can move in and enjoy the freshly updated space. You might have an eye for design and see a cosmetic fixer as an opportunity to choose your own finishes and make a space your own vs buying something in great shape that doesn’t match your style. Maybe you see it as an investment opportunity and plan to fix it up to be more desirable to more people and sell it for a profit. Whatever your plan is, cosmetic fixers can be a good option for lots of buyers!

 

If you’re ready to start shopping for a cosmetic fixer in Portland or the surrounding areas, give me a call. I’ll happily show you homes with potential that just need a little TLC. I love a design project and can discuss how to meet your goals and make a place your own.

To buy “as-is” or not to buy: Competitiveness in a seller’s market

Posted on by Bonnie Roseman
Hot market offer tricks

In a seller’s market, buyers have to weigh every decision when making an offer to buy a home. Being competitive means trying everything you can to sweeten the deal. Promising to release earnest money just for getting acceptance, making up a cash shortfall in the event of a low appraisal, limiting repair negotiations, forgoing inspections, or even committing to an as-is purchase are all terms that are on the table to entice the seller and have the winning offer on a hot property. A buyer purchasing a property in as-is condition can certainly be to the seller’s advantage, so long as the sale closes.  Is the risk worth the reward?

Should you make an as-is offer?

Committing to purchase property in as-is condition in advance of having it inspected is high risk. You cannot tell what the condition of the sewer line is, what is hiding in the crawlspace or behind the face of the electrical panel, or possibly even the condition of the roof or chimney on a tall home. While an as-is purchase may sound appealing to the seller, the agreement can backfire. Buyers still may have the right to terminate the purchase if they aren’t satisfied with what they learn about the property during inspections. That risk may be higher if the buyer feels they have no wiggle room to negotiate solutions to big problems. I always counsel sellers that if there is an inspection contingency alongside as-is terms, the offer may not really end up as-is. I encourage cooperating agents to have conversations with their clients, as I do with mine, to consider negotiations if it will save a transaction that is otherwise falling apart. It is fabulous when it all plays out as planned and buyers can honor their as-is terms and still afford to buy the property, but sometimes flexibility is needed to get to the finish line!

A compromise?

An alternative to a totally as-is offer is to write in some seller protections regarding repairs. For example, a buyer might state that they will not negotiate any single repair item that costs less than a specific dollar amount to correct, perhaps $1,000 or $5,000, etc.. This provides the seller assurance that they will not be presented with an irritating laundry list of little to-do’s, but provides a path to negotiate big ticket fixes. The buyer risks the possibility of multiple items that come in under their threshold, but that together add up to more than the buyer’s budget can handle. As with as-is terms, it may require some flexibility to seal the deal.

Tough choices!

Further complicating all of this is that there is pressure to have shortened inspection contingency timeframes; yet inspectors are frequently quite booked up. This means that the home inspection appointments may occur with little to no time left in the buyer’s inspection contingency to get estimates for needed repairs. The buyer’s earnest money deposit is protected by that contingency and they may not be able to negotiate an extension for more discovery. Buyers often find themselves at the precipice of a cliff: either blindly accepting the unknown cost of making needed repairs or letting go of the house they finally managed to get an offer accepted on. 

Examples of costly needed home repairs:

 

Repairs and Final Walk-throughs

Posted on by Julia Robertson

You’re buying a home. You’ve completed your inspections. You’re waiting to close. Now what?

You’ve made it through the inspection period and the seller has agreed to complete some home repairs. Congratulations! Now what? A week before closing I remind my clients about the closing process and to schedule a final walk through before closing. Besides asking the seller to provide any invoices or photos showing the repair has been completed- schedule a final walk through at least 3-5 days before your closing date. It’s always a good idea to double check that seller has completed the items they’ve agreed to repair.

Often you’ll find that a seller is scrambling to get those last repairs done, or cleaning up their move out. You’ll walk through the house with your real estate agent and verify that the items have been repaired.  I’ve found that a day or two before closing is just not enough time to remedy unfinished repairs. If a seller has not performed the agreed repair, do not give authorization to close until you are satisfied. This may delay your closing and you’ll have to write an extension to close.

Here are some repair and final walkthrough tips-

  • Make sure your repair requests are written in detail or refer to a specific scope of work.
  • In addition to your inspection report, get a professional estimate for repair.
  • If you are asking for a sewer repair, request that the seller scope the line after the repair and provide you the video of the scope.
  • Make good judgement about work that is being completed by homeowner or needs to be completed by a licensed & bonded contractor. There is a lot of work that a homeowner can do on their own. If the repair is related to a “service” of a major appliance, structure, or health/safety issue- request a professional handle that repair.
  • If a repair is being completed after closing, for example a sewer repair- ask for escrow to hold back additional funds in case the repair exceeds the provided estimate.
  • Your repair request agreement has a date written in which the repairs need to be completed by. If you haven’t seen photos or invoices come in, check in with your REALTOR® to request them from the seller.

If you are thinking about buying a home- give me call! I’d love to help you through the real estate process.

Julia Robertson | Broker | Living Room Realty

541-505-1111 | julia@rebyjulia.com