House Rich, Cash Poor, The House Got $90K In Upgrades From Equity

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Real Estate Agent with EXIT Realty Associates 0225241091

Bob and Kathy enjoyed raising their kids in their lovely single family home in Lake Ridge home that they bought in 1992, with $37,000 down payment, and a 9.5% loan.  Over the years they refinanced their mortgage to 5%, then to 3.25% on fifteen year loans as rates fell.

 

The kids were grown and gone, with homes and families of their own.  Bob and Kathy didn't need a big 5 bedroom, 3.5 bath home with a finished basement.  Bob has a 100% VA disability rating from the VA for his knees.  Bob's knees took a beating during his years of service with the 82nd Airborne Division.  Bob sufferes severe pain when he goes up and down stairs.  So much so that he limits his trips to and from the master medroom on the second floor to once down, and once up each day.  They needed a home with a master bedroom on the main level.

 

Bob and Kathy were referred to me by Jim and Linda after I helped Jim and Linda move from their two story colonial to a single level Carolinas styled home with a guest suite, rec room, and theater in the fully finished basement.  

 

I sat with Bob and Kathy and really listened to their pain that was motivating them to move, then I helped them visualize their dream of what their next home would look like, feel like, and the emotions they would feel living in that home.  I opened my iPad, logged onto MLS, and showed them examples of homes in the area that are less than five years old, or new, with main level master suites, for less than $700,000.  Kathy was thrilled with the designs, and Bob was relieved to know that their were home they like within their budget.

 

Then we had to talk about selling their house.  It was stuck where it was built, in the 1980's.  Nothing had been updated, except for carpet that wore out over time.  "Bob, Kathy, when you went on the MLS with me just a moment ago you were looking for your dream home... am I right?"  They nodded their heads.  "Buyers for your home will be looking for their dream home too.  Their dream home will have wide plank hardwood floors on the entire main level.  The kitchen will have new cabinets, and quartz counter tops, with a center island, and overhead recessed floodlights.  They want the bathrooms to look like 2019 bathrooms, with new tile, frameless shower doors, new cabinets, quartz counter tops that match the kitchen and recessed lights. 

 

Does that make sense to you?"  "Yes it does, but Erick, that sounds expensive.  We don't have a lot of cash on hand because we have always contributed the max to our 401k's, and we have a ton of equity in our home," Bob said.  "Based on my experience, you're looking at $90,000-$100,000 to make your house a new buyer's dream home.  Right now, in its present condition, you could expect an investor to pay you $400,000 for your house, fix it up, and sell it for $625,000.  You could fix it up yourself and reap the rewards," I said.  Bob said in anguish, "We don't have $100,000.  We have just $30,000 cash, and that's it."

 

Watch the video find out what happened next...

Posted by
Erick Blackwelder Front Porch Real Estate with Erick Blackwelder 703-677-1120 www.EXITRealtyAssociates.com Lorton, Virginia

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