Assessing the Real Cost of a Fixer

What's the Real Cost of a Fixer?

 

It can be very compelling to find a home in a neighborhood you like that is bargain priced. But how do you know if it will be a good investment? The only certainty in a fixer project is that there will be a substantial amount of uncertainty and risk. There can be significant rewards too, which is why the call of a fixer is so loud for opportunistic buyers.

Here are a few guidelines to determine how much how much to offer and whether a fixer is the right house for you.

 

Step 1: Determine the initial scope of work

Make a list of the most obvious items to be addressed. Decide which items are within your skill set to accomplish yourself and which ones need to be contracted out. Spend some time calling contractors and researching each item to get a ballpark idea of the cost to complete—either the raw materials expense to DIY or the contractor’s price to do it for you. Calculate in an additional 20% for unexpected issues and cost overruns. Add these to a spreadsheet along with the time each project should take. Keep in mind this is an initial evaluation intended to be done before you invest too much time and money into negotiation or inspections.

It’s well worth spending a few minutes talking to the city or county building department to verify which work requires a permit and what the cost and process is before proceeding. Don’t forget to calculate in the cost of obtaining permits for electrical, plumbing, major remodel, or structural changes into your total budget. Getting permits can be time-consuming but doing work without a permit will ultimately create bigger problems when you go to sell because lenders and buyers will want verification the work was permitted and completed properly.

 

Step 2: Do a reality check

Do you have the readily available cash or an approved line of credit to fund this project plus any cost overruns? Do you have the skills and patience to manage or complete the renovation work? Are you able to fit the work itself or the oversight of contractors into your current life schedule without compromising your life values? Will the time and money you invest be worth it in the end product? Are you willing to live in a construction zone while work is being completed?

Don’t skip this step! The answer to these questions will be different for everyone. Some people take on a project because it pencils out without fully evaluating what the impact on their lifestyle will be. A savvy fixer buyer will go in with full awareness of what they are taking on and the project will be much smoother as a result.

 

Step 3: Determine your offer price and strategy (and max purchase price)  

This is where your broker can be an invaluable resource. They can assess a home’s as-is market value and also its potential finished value. Calculating in the costs you identified in step one—including the 20% for unexpected issues and cost overruns—will give you an idea of your max purchase price. Don’t forget to consider expenses like the cost of living elsewhere during renovations, the inconvenience of living through a remodel, and the value of your time invested.

From there, your broker can evaluate market activity and present options for offer strategies, including an initial offer price. Your offer should always include an inspection and sewer scope or septic contingency unless you’ve completed them before making an offer. Here are additional contingencies you may want to include to protect you in your purchase.

 

Step 4: Don’t skimp on the inspection

Assuming you’ve decided that you and your pocketbook are up for the challenge, the next step is to hire the best inspector you can find to make a thorough assessment of the home. If there is obvious deferred maintenance you can see, there are likely to also be many other issues you can’t see. A good inspector will identify those and provide insight into the overall structural condition of the home. Well-built homes with “good bones” make much better rehab projects than homes of mediocre quality.

Don’t forget to scope the sewer line or evaluate the septic system. Both are potentially big-ticket items that don’t add any visible value to your finished product. If you are in an area that may have had oil heating at one time, also confirm there are no underground oil tanks remaining.

If major structural issues are identified or there are indications of problems that cannot be fully investigated, think seriously about proceeding without getting permission to have a structural engineer or general contractor investigate further.

 

Final thoughts

By thoroughly completing your due diligence, you can mitigate much of the risk associated with purchasing a fixer. Having remodeling skills or connections to outstanding contractors is critical. Lastly, if this is your first-time renovating a home, purchasing a home that is simply tired and dated rather than having significant deferred maintenance or structural issues will help you keep your project in the black.

Still have questions? Contact one of our knowledgeable brokers for assistance with how to purchase or determine the value of a potential fixer.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island

Posted on March 17, 2020 at 8:00 am
Jennifer Craven | Category: Buyer Tips | Tagged , , , , , , , ,

2020 Home Trends

2020 Interior Design Trends: 5 Takeaways to Refresh Your Home

 

With 2020 now in full swing, we’re seeing some clear shifts in how homes are being designed and decorated.  Most notable for our area is the Modern Farmhouse trend with its juxtapositions of old & new, light & dark, and clean & rustic.  Softer grey and lagom neutrals are here to stay, but are now being contrasted with deep hues and warm metals.  Organic materials such as natural wood and potted plants are also gaining prominence.  Here are some key trends to consider as you refresh or renovate…

 

#1: High Contrast Hues


Deep blue is the “it” color in home decor, with Pantone’s “Classic Blue” and Sherwin-Williams’ “Naval” each taking color of the year honors.  Navy accent walls are gaining popularity in smaller spaces such as foyers, dining rooms and powder rooms.  Black is also back as an accent set against white in kitchens, living rooms and bathrooms.  High-contrast graphics are making an appearance on wallpaper and bathroom tile.


 

#2: Vintage Meets Modern


Whether it’s antique artwork, floral wallpaper or vintage tile, old world charm is making a comeback…with a twist.  This time around we’re seeing vintage framed art, patterns, woods and statement pieces being incorporated into modern spaces with clean lines.  The Modern Farmhouse epitomizes this trend with its clean new take on the old.


 

#3: The Non-White Kitchen


The all-white kitchen is making room for grey and painted cabinets to take the stage.  For the daring, “color pop” cabinets in deep blue, black or even red have been cropping up in the modern kitchen.  Kitchens that do have white cabinets are being spiced up with decorative tile floors and backsplashes, along with darker wood shelving and contrasting light fixtures.


 

#4: Comfy and Cozy


Soft shearling, rustic leathers and fluffy textured mohairs are gradually replacing the luxe velvet we saw in years past.  High performance outdoor-style fabrics have also gotten an upgrade and are appearing indoors on upholstered dining room chairs and couches.  Cushy wing-backed dining benches and chairs are another notable trend, part of an emphasis on making dining rooms less formal and more comfortable.  Another fun trend?  Curved sofas for the dining room and kitchen.


 

#5: Warm & Earthy Accents


Matte brass continues its popularity in fixtures and frames, often mixed with silver metals.  We’re seeing an infusion of aged wood accents, patina, rustic leathers and earthenware softening the clean lines of today’s minimalism.  Potted plants are also popping up on shelves and in windows with olive trees usurping fig trees as a favorite statement piece.


 

Need an instant home update?  Try adding throw pillows, blankets or artwork in hues from Pantone’s Spring/Summer 2020 color palette.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island

Posted on March 4, 2020 at 1:42 pm
Jennifer Craven | Category: Buyer Tips, Homeowner Tips and Happenings | Tagged , , , , , , , , ,

The Right Timing Can Bring You Thousands More When You Sell

Timing the Market to Get More for Your Home

 

Ever notice how one home on your street sells well above asking price with a line of buyers out the door and an identical home comes on a month later and sits on the market for two weeks before finally selling at a reduced price?  Every. Day. Counts.

It’s not always about the house. It’s also about timing the market well. In a world where potential buyers know how long you’ve been on the market down to the minute, being on the market a nanosecond longer than expected can be painful for any seller, financially and otherwise. Statistically, at mainstream price points, prices seem to peak around Day 7 and begin to slide downhill after Day 10.

 

How to time the market in a nutshell.

Avoid coming to market during major holiday weeks. Potential buyers take vacation too—and the fewer buyers out there looking in those precious early days, the lower the likelihood you’ll sell in the first 10 days. Look to come on the market a few days after typical vacations are over to allow buyers to re-engage in the search process. Avoid coming to market when a similar house in your neighborhood has just listed and not yet sold.

The laws of supply and demand would dictate that when supply appears abundant, demand diminishes—and the days tick on by. Even if you are by far the better house and at a better price, you might still be hurt by the curiosity around why everyone is selling now.

Avoid coming to market during bad weather or local events. Like coming on market right smack in the middle of graduation week, listing when everyone’s attention is on something other than home shopping is likely to miss the mark big time. Even if you were all set to list on a particular date, it might be better to take a deep breath and wait until the storm passes.

Do come to market when you notice an absence of great listings for sale in your price range and neighborhood. Buyers will likely feel that void too and be chomping at the bit for the next great home to come along. The chances of a perfect match between a solid buyer and a reasonable seller are best in this zone.

This is especially true if your home has challenges (outdated design, deferred maintenance, busy street, steep slope, etc.) that would make it difficult to compete with other homes out there. On the flip side of that coin, if your home is exceptional, you want to be on the market during peak season when buyers can size up your home to the competition and appreciate how much better your home is. Buyers will pay handsomely for turnkey quality when they can clearly see the difference. Come on when there is nothing else to compare to and your beautiful amenities might not see their full value potential.

The best days to come to market are Tuesday, Wednesday or Thursday. This allows for showings and open houses on evenings and throughout the weekend. If you are doing an offer review date, the best day to review offers is Monday or Tuesday. This gives buyers ample time to see your home, conduct their due diligence, complete a home inspection and sewer scope, and get their financial documentation together—all before they prepare an offer.

Final thoughts.

Look at the holiday calendar and local school district calendars to guide you toward best weeks to come to market. Don’t forget to check in big political and sporting event dates too.

Decide whether your home will shine against the competition, or be the wallflower, and adjust your timing based on real-time competition.

Of course, an outstanding listing broker can help you choose the most favorable date to bring your home to market. They analyze the market consistently and know exactly what indicators to look for. Still have questions? Contact one of our knowledgeable brokers for assistance with determining the best market timing for your home.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island

Posted on February 28, 2020 at 4:52 pm
Jennifer Craven | Category: Seller Tips | Tagged , , , , , , , ,

Flip or Flop? Is That Gorgeous Makeover All It’s Cracked Up to Be?

Is That Flip a Flop? How To Find Out Before You Buy

 

It seems like the perfect combo of fantastic location and newly renovated home. But is it really? The concept of renovating a tired home for profit (flipping) is a business model that is often naturally averse to the future buyer’s interests. The lower the costs, the higher the profit. And, the lower the costs, the lower the sale price—which means more buyer demand.

This isn’t always the case. Some flips are done very well with a higher aesthetic and higher matching sale price. Unfortunately, this is often the exception to the norm. A very good local inspector shared that he’s done thousands of inspections of flipped homes and maybe a few dozen of them were well done.

The allure of a flip is clear—a move-in ready home in an established neighborhood where you can literally unpack and live without needing to address the typical laundry list of to-dos that often comes part and parcel with an older home. It’s when those gleaming new veneer surfaces give way to subpar work beneath that the problems arise.

So, how do you protect yourself if you happen to fall in love with a flipped home? This list below is a great place to start.

 

Must Do’s When Considering the Purchase of a Flip…

  • Verify the seller (flipper) is a licensed contractor as required by state law (RCW 18.27) (you can research them using the state’s L&I Contractor Database and Corporation Search tools)
  • Verify all necessary permits with filed and finalized with the city (you can look up who to contact using this handy link to Building & Permit Resources)
  • Google the contractor to see if anyone has shared reviews, good or bad
  • Ask for references and a list of other flips completed by this contractor and then drive by and call to find out how the product has stood up over time
  • Visit the city or county who has jurisdiction over building permits and ask questions about your potential home and about the contractor who did the work (you’ll often find out more info directly than you can otherwise)
  • Hire the best inspector you can find and alert them that the home is a flip before they begin their inspection so they can look more closely for indications of shortcuts and subpar work that might be covered with gorgeous veneer
  • Talk to neighbors about the project to find out what they know about issues with the original home or work that was completed (bonus: you get to meet the neighbors!)

It’s most time and cost-effective to go through this list in order when possible. The bottom line is that a little more research now can save you countless hours, headaches and expenses down the road. Quality, professional flippers will welcome your questions and the opportunity to differentiate themselves from less reputable contractors.

In addition to this specific research, don’t forget to evaluate all the typical aspects of your potential new home and neighborhood. We’ve compiled links to research tools from schools and geological hazards to market reports and census data.

While you’re there, you can also look up neighborhood info, including crime reporting, local government resources, parks and recreation, and school boundaries.

Of course, nothing tops having an experienced broker to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. 

Posted on November 9, 2019 at 10:50 am
Windermere MI | Category: Buyer Tips | Tagged , , , , , ,

Planning for the Life Expectancy of Your Home

Planning Ahead: The Life Expectancy of Your Home's Components

 

Nothing in life lasts forever – and the same can be said for your home. From the roof to the furnace, every component of your home has a lifespan, so it’s a good idea to know approximately how many years of service you can expect from them. This information can help when buying or selling your home, budgeting for improvements, and deciding between repairing or replacing when problems arise.

 

According to a National Association of Home Builders (NAHB) study, the average life expectancy of some home components has decreased over the past few decades.  (This might explain why you’re on your third washing machine while Grandma still has the same indestructible model you remember from childhood.) But the good news is the lifespan of many other items has actually increased in recent years.

 

Here’s a look at the average life spans of some common home components (courtesy of NAHB).

 

APPLIANCES. Of all home components, appliances have the widest variation in life spans. These are averages for all brands and models and may represent the point which replacing is more cost-effective than repairing. Among major appliances, gas ranges have the longest life expectancy, at about 15 years. Electric ranges, standard-size refrigerators, and clothes dryers last about 13 years, while garbage disposals grind away for about 10 years. Dishwashers, microwave ovens, and mini-refrigerators can all be expected to last about nine years. For furnaces, expect a lifespan of about 15 years for electric, 18 for gas, and 20 for oil-burning models. Central air-conditioning systems generally beat the heat for 10 to 15 years.

 

KITCHEN & BATH. Countertops of wood, tile, and natural stone will last a lifetime, while cultured marble will last about 20 years. The lifespan of laminate countertops depends greatly on the use and can be 20 years or longer. Kitchen faucets generally last about 15 years.  An enamel-coated steel sink will last five to 10 years; stainless will last at least 30 years; and slate, granite, soapstone, and copper should endure 100 years or longer. Toilets, on average, can serve at least 50 years (parts such as the wax ring, flush assembly, and seat will likely need replacing), and bathroom faucets tend to last about 20 years.

 

FLOORING. Natural flooring materials provide longevity as well as beauty: Wood, marble, slate, and granite should all last 100 years or longer, and tile, 74 to 100 years. Laminate products will survive 15 to 25 years, linoleum about 25 years, and vinyl should endure for about 50 years. Carpet will last eight to 10 years on average, depending on use and maintenance.

 

SIDING, ROOFING, WINDOWS & DECKS. Brick siding normally lasts 100 years or longer, aluminum siding about 80 years, and stucco about 25 years. The lifespan of wood siding varies dramatically – anywhere from 10 to 100 years – depending on the climate and level of maintenance. For roofs, slate or tile will last about 50 years, wood shingles can endure 25 to 30 years, the metal will last about 25 years, and asphalts got you covered for about 20 years. Unclad wood windows will last 30 years or longer, aluminum will last 15 to 20 years, and vinyl windows should keep their seals for 15 to 20 years. Cedar decks average 15-25 years if properly cleaned and treated, while high quality composite decks should easily last 30 years with minimal maintenance.

 

Of course, none of these averages matter if you have a roof that was improperly installed or a dishwasher that was a lemon right off the assembly line. In these cases, early replacement may be the best choice. Conversely, many household components will last longer than you need them to, as we often replace fully functional items for cosmetic reasons, out of a desire for more modern features, or as a part of a quest to be more energy efficient.

 

Are extended warranties warranted?

Extended warranties, also known as service contracts or service agreements, are sold for all types of household items, from appliances to electronics. They cover service calls and repairs for a specified time beyond the manufacturer’s standard warranty. Essentially, warranty providers (manufacturers, retailers, and outside companies) are betting that a product will be problem-free in the first years of operation, while the consumer who purchases a warranty is betting against reliability.

 

Warranty providers make a lot of money on extended warranties, and Consumers Union, which publishes Consumer Reports, advises against purchasing them.  You will have to consider whether the cost is worth it to you; for some, it brings a much-needed peace of mind when making such a large purchase. Also, consider if it the cost outweighs the value of the item; in some cases, it may be less expensive to just replace a broken appliance than pay for insurance or a warranty.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.

Posted on August 30, 2019 at 2:59 pm
Windermere MI | Category: Buyer Tips, Homeowner Tips and Happenings | Tagged , , , , , , , , , , , , , , , , , , , ,

How to Spot Big Issues Before You Pay for a Home Inspection

How to Spot Big Issues Before You Pay for a Home Inspection

 

Before you plop down $500-$800 for a home inspection, it really helps to identify obvious issues up front and determine if A) you are willing to buy the home despite them or B) the seller appears reasonable about addressing them. If neither of the above are yes, but you might want to keep looking rather than investing hard-earned dollars in an inspection that, at minimum, will bring up items that you can clearly see, and more likely, will unveil even more issues.

Taking a bit of time to do a quick personal inspection of the property you are ogling can help you make smarter decisions about when or whether to write that offer. This list includes bigger ticket items we often see come up in an inspection.

 

Indicators of bigger ticket items to be on the lookout for:

    • Evidence of moisture or water damage in and around showers or tubs and under sinks
    • Missing or cracked grout/caulk around the tub or shower (a major cause of rot in walls and the sub-floor)
    • Cracked, peeling or weathered exterior paint and caulking
    • Evidence of moisture or water damage around the exterior, especially at windows and doors
    • Heavy moss, sagging or a roof that looks near the end of its life span
    • Signs of improper drainage around the perimeter of home, driveway and yard
    • Unexplained mildew smell in the basement
    • Uneven floors or the appearance of leaning or sagging
    • Obvious remodeling completed with no permits on file (this is easy to lookup online), especially when involving opening or movement of walls, plumbing or electrical
    • Rotted or damaged deck/porch boards, stairs, railings, or supporting joists/structure
    • An aging heating/AC system (more than 15-18 years old and/or no recent maintenance stickers)
    • An aging hot water tank (more than 9-10 years old)
    • Aging appliances (more than 10-15 years old)
    • An electrical panel that appears modified by someone other than an electrician (obvious changes that don’t look proper, open breaker sections or loose wires)
    • Railings (inside or out) that are missing or not up to code (ie. your smaller toddler could fit through them)
    • Cracked or damaged foundations or retaining walls
    • Evidence of unstable soil/earth movement (slides, cracks or gaps, leaning supports/structure or trees)
    • Evidence of rodents (odor, droppings, chew marks or damage around exterior/vents)
    • Properties with a high likelihood for costly sewer line issues include those with very large trees near the most likely sewer line path and those more than forty years with no prior evidence of sewer line re-lining/replacement
    • Signs of home maintenance neglect such as broken or missing hardware or components, improperly functioning doors/locks

 

Not all these issues will turn out to be major expenditures, but they often can be. Better to note them early and decide if it makes sense to proceed with a more thorough professional inspection or walk away and save those dollars for a more likely candidate.

 

Here are a few great online resources to add to your knowledge base:

https://www.homeinspector.org/HomeInspectionNews/the-quick-home-inspection-checklist-what-to-look-for-when-buying-a-home.5-1-2017.1724/Details/Story

https://www.hgtv.com/design/decorating/clean-and-organize/common-problems-found-during-home-inspections

https://www.familyhandyman.com/smart-homeowner/tips-for-getting-the-most-out-of-a-home-inspection/

https://www.zillow.com/sellers-guide/bad-home-inspection-for-sellers/

https://wini.com/articles/home-inspection-checklist-a-complete-guide-to-the-home-inspection-process/

https://www.familyhandyman.com/smart-homeowner/home-facts-this-is-how-long-these-parts-of-your-home-should-last/

 

Of course, nothing tops having an experienced broker to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.

Posted on August 13, 2019 at 9:08 am
Windermere MI | Category: Buyer Tips | Tagged , , , , , , , , , , ,