This past weekend, I went to a house-warming party for some former clients that closed escrow a few months ago. I hadn't seen their home since the week they closed escrow and it was so nice to see the changes they have made since then. It got me to thinking about how they almost didn't buy this home because it was kind of a fixer. Amazing what a little time and sweat equity as well as a few professional upgrades can do for a home.
Here in Los Angeles & Ventura counties, our real estate market is absolutely saturated with run-down, dilapidated, dumpy properties. While most of the properties that fall into this category are REO's, they're most certainly not limited to just vacant foreclosures but can also be short sales as well.
Think about it, if you've got a homeowner who is not paying their mortgage, chances are they're probably not keeping up with routine maintenance matters either, especially if it's an investment short sale.
While I'm not a Realtor out there showing and listing these properties, I do see quite a few of the properties that many of my clients purchase. So many of the properties that many of my clients end up purchasing have so much deferred maintenance that for some of my buyers, it's really hard to get past the "cosmetic" issues to actually get a good idea of the properties "bones".
It's just disgusting the way that some of these properties are marketed and are allowed to be shown. I've lost count on how many properties I have walked into where it was obvious that the REO listing agent (LA) had not only never even been to the property before, but they obviously had no idea what the inside looked like and probably got that one picture in the MLS from the previous MLS listing.
For many of my clients, because of the price range that they're in is in the low end of the market around here (400k<), these are typically the only types of properties that they can afford to purchase. On that note, I try to prepare my clients (before they actually get out there looking at properties) of what they can expect to see in their price range. I try to explain to them the differences between a "cosmetic" fixer and a "total rehab" fixer.
It's usually at this point that I will discuss loan options for the "total rehab" fixer. But mostly, I try to encourage my clients to have a vision and to try and get past some minor deferred maintenance that is just "cosmetic" and to try and really see the home without these issues. It's amazing what a professional cleaning, trash removal, fresh paint, new flooring, new fixtures and some gardening and landscaping can do for a property.
For some, vision does not come naturally and they become so completely turned off by deferred maintenance that it actually becomes somewhat of a hindrance to their home search. They want that "move-in" ready home for that "total rehab" fixer price. They're not willing to look over and/or consider some minor "cosmetic" repairs in order to get a home with a great floor plan in a wonderful neighborhood.
The smart and motivated buyer though eventually learns to see the beauty under the beast (so to speak) or the "diamond in the rough". For example, last year, I worked with a couple who purchased a totally run-down, dilapidated, dump that was so incredibly disgusting when I first saw it, I actually asked my clients if they were out of their minds or on drugs even thinking about buying this home.
It was actually kind of bizarre watching my clients as they told me about their vision for the property and the plans they had if they could buy this home. It actually stopped me dead in my tracks, either that or it was the unknown goo that was all over the floor that prevented me from moving from the spot I was literally stuck to.
The property was absolutely filthy! The seller's son had been squatting in it for several months with his dog and several friends and the only redeeming quality about this property was that it was on a secluded, beautiful, tree-lined street in an absolutely wonderful neighborhood.
Don't even get me started on the stench that literally knocked you back a few feet just walking in the front door. Once again, there were the floors (a combo of hardwood & tile) that we were literally sticking to with every step we took. I actually lifted my pant legs up and walked on my tippy toes so that I had as little as possible actually touching that floor. Needless to say, I touched absolutely nothing else in the house that day, including the punched out walls, hanging doors with no door knobs or the horrendous trash everywhere that I am positive I saw moving once or twice. I'll leave the description of the yards to your own imagination.
Anyway, we eventually closed escrow on that property but, of course, not without a lot of hassle and drama that wore every one of us out by closing day. My clients were ecstatic and were so excited about getting started on their dream home.
It's been more than year since then and I have been to see my new friend's (they're in my hometown and we see them regularly) home on numerous occasions now and I have to admit, their vision is coming true. I would have never imagined it but fortunately for them, they did have a vision and a plan and they now have an absolutely wonderful home.
Hubby and I have been invited to a Halloween party at their home in a few weeks and I am so excited about seeing them again and seeing all the new things that they've done to the home since we were last there.
MORAL OF THE STORY: think twice before passing on that "fixer". That "dump" can actually be a "diamond in the rough" with a little vision.