If you didn't guess by the title, this is going to be a rant, of sorts. Most real estate markets have changed, a lot, in the last 2-3 years or so. I know the the Hickory NC real estate market sure has. There have probably been several changes, too. Many markets have suffered sometimes major price drops, longer selling times and a larger portion of short sales and REO's (bank owned) properties, too. With all that, you also get homes that may need a little to a lot of work, and buyers that want to find a good deal or a "fixer-upper" as they say.
Case in point; I was recently working with a buyer and we looked at a few houses to which they basically said that they were nice, but they'd like a little more room (of course, without going up in price). Sure, not a problem. Would you all be interested in looking at homes that need a little work? YES SIR! That's what we want.
Well, I just happen to have one of those listed and in the right area, so we pop on down there and let them have a look at it. Now, this home could use some fresh paint on the main level. Nothing bad, per se, but it's not 'new' paint and has a few dings. The finished basement had recently been repainted and the old carpet had been removed. The new carpet rolls were there, but not installed. Besides that, there were a few other small issues (broken doorknob, missing outlet cover, etc). The buyers replied, "too much work for me." Well, this is about as minor of a fixer upper as you can get. If this is too much work, then we probably don't need to be looking at fixer uppers.
I want to add here that this home is already priced tens of thousands of dollars less than current market price for the neighborhood and the listing clearly states that a little paint and "TLC" is needed. There are also lots of pictures that easily show the work needed and finally, this property is still in "move-in" condition. There isn't anything that would have to be fixed first.
The Problem: I've had more agents (and buyers) go through this thing than you'd see at a REALTOR's open house serving Rib-Eye Steak! Most of the feedback responses fall into a few categories.
The Too Much Work for my Client Feedback
A have the most problem with this one. Sure, this MAY have been the house that the agent tested the waters on, but usually it's not. In most cases, I don't think that they've even asked the buyers if they'd be interested in looking at something that needs a little work. Why? Because I also get the "house needs work" response, too. DUH! That's in the listing, people.
The My Buyers Are Already at the Top of Their Price Feedback
This one is similar to the too much work, but it's not that the buyer's are afraid of doing the work, it's that the asking price is already at the max they can afford, they have no savings, so they don't have any extra money to do the needed work.
The We'll Take it IF Feedback
This one, I really love. What normally follows the IF is 'fix everything.' We'll take it if the seller fixes everything. Hello? Selling for thousands less than market because of needed repairs already. Selling "as, is," too. IF the seller was willing and able to do those repairs, then they would already be done and the price would reflect that (as in, a higher price). Why this one is really a problem is because it's usually accompanied with a lowball offer on the already lowered price.
The Repairs are Too Expensive Feedback
This one is similar to Too Much Work, but with a difference. The agent, in all their remodeling experience, has informed the buyer of the estimated cost of repairs. Now, if the agent has some rehab knowledge, great. I've been rehabbing for 7 years, so I've got a pretty good handle on repair costs. However, from the responses I get here, most agents don't. The best one by far was an estimated $20K in repairs costs. REALLY, I said. What exactly is your buyer wanting to do. Oh, the paint and carpet.
Now, in this area, you could hire the work out for everything on this home for $5K or so. I could get it done for half that. I had one potential buyer that was looking at adding new counter-tops, tearing out a load-bearing wall, adding new hardwoods throughout, pouring a new sidewalk and that didn't come up to $20K. Yet, there are agents out there that believe that it's going to take $20K to paint and carpet a home?
The point of all this is just to say, if you're considering looking at homes that need repair, it's important that you have an idea of what repairs exactly, you are willing to consider doing. As an agent, you need to screen the buyers looking for the "deal" so that you're not wasting your time, their time or the listing agent or seller's time, either showing properties that they will never consider buying.
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