Minor Home Repairs and Improvements: Big Rewards
Want to be way ahead of the majority of home buyers AND save yourself a bundle of money to boot? Be less concerned about the “cream puff” houses that need little or no work (and command a premium price) and focus on the “ugly ducklings” (those properties that need a bit of TLC and are under many buyer’s radar).
It is a fact of home buying that many buyers simply have no “vision” when it comes to looking for (and at) a house. They often cannot see past a wall that needs painted, a door that needs replaced, shubbery that is in need of trimming. This is especially true of first time buyers who, quite naturally, are looking for their “dream house.” In most buyer’s eyes, a dream house does not arrive dressed in ugly colors or with worn out appliances. As a result, the best looking and “best dressed” houses get the most activity, the most offers and the highest prices. The advantage, though, often goes to the buyer of those properties that DO need a bit of cosmetic work, since frequently the cost of those repairs is considerably less than the amount of price saving that is available when compared to “ready to go” houses, especially if you are willing and able to do much of the work yourself.
When we speak of “minor home repairs and improvements” we are referring to those repairs or improvements that do not involve the need for major construction nor have structural elements. For example, we would consider new carpeting throughout the house as a cosmetic improvement. In contrast, repairing a rotted bandboard–part of a house’s support–should not be attempted by the average home purchaser.
Some examples of minor repairs and improvements:
1. New paint: Interior, exterior or both
2. New carpeting
3. New appliances
4. New plumbing fixtures (faucets and the like)
5. New electrical fixtures (vanity lights, hall and kitchen lights, etc.)
6. Landscape improvements (cleanup, planting lawns and shrubbery)
If you do some or all of this work yourself, you can compound your savings appreciably. Obviously, you should leave certain jobs to the professionals (eleictrical repairs, for example) but painting, landscaping and some minor repairs can usually be handled fairly easily.
Here is an example of how cosmetic improvements can bring fairly decent rewards. These are not actual property histories but are used for demonstration.
Property A is a “heart-stopper.” The exterior has just been painted, the yard and grounds are just about perfect with a well trimmed lawn, manicured shrubbery and fresh mulch. Beautiful flowers are blooming everywhere. As soon as you open the front door the smell of new carpeting and fresh paint envelop you. This property screams “Doll House!” and the high level of buyer activity proves this out. Listed for $209,000, there are several competing offers and eventually the house settles for $217,500, all in just over a month’s time.
Property B has very little of what Property A had going for it. Although it is in the same neighborhood and actually is slightly larger than Property A, “deferred maintenance” is the keyword here. The exterior is badly in need of painting, the carpeting inside is a dull gold shag, the walls, although not badly damaged, are in various 1970’s shades of paint. In the kitchen, the cabinets are in need of cleaning but are in good shape, and the rest of the room looks very dated with the avocado green refrigerator, stove and dishwasher. Although there is some buyer activity on the house at first, it tails off fairly rapidly as the word gets around that the property “needs
some work.” The listing gets a little tired, and gets shown less and less as the weeks draw on. Originally put on the market for $195,000, the price is reduced to $189,000 and finally settles, after another 60 days on the market, at $183,000.
Because of the very competitive real estate market that exists in many areas today, even though the original list price of Property A– the “doll house”–was only $14,000 more than Property B, there was a $34,500 difference in the final selling prices. Depending on the market conditions, average selling prices and the level and cost of cosmetic improvements, the difference could be more or less, requiring a buyer to do some research prior to committing.
An Important Caveat
As always, we strongly recommend a whole house inspection by a competant and experienced professional before the purchase of any home. This is especially important in the case of properties in need of cosmetic improvements for a couple of reasons. First, when cosmetic repairs are needed, it could signal that there are deeper, more expensive problems with the house. For example, exterior siding that is weak and in need of paint could be hiding much more expensive water damage behind the siding. Second, if the previous owner deferred maintenance of the easy, less expensive improvements and repairs painting and the like) it is pretty likely that they also deferred much more expensive repairs and maintenance (like roofs and heating systems). A complete whole house inspection will give you a much clearer picture of what needs to be done to the house and a general idea of the expense involved. See the section devoted to home inspections for more information.