Buying a house...first steps?! cost estimates?
Hi all, I’m new to the forum and have some big questions. Our dream is to own a house and I’ve seen a bunch that need fixing up in the Gowanus / Park Slope /Windsor Terrace areas, which we love. The prices seem all over the place. What would you say is a FAIR price for a place that needs a large amount of work (say $200,000) in those areas? (NB: I’m not talking prime or center slope, forget that; not affordable). Also, WHO should we bring with us when looking at these places who can tell us ACCURATELY and honestly what needs to be fixed urgently / less urgently and what the costs would be – ballpark. A contractor? An engineer? An architect? Obviously, we can’t ask all these people to come to all these places with us…for free. How does that work? We have no knowledge of our own. WE have only done remodeling so far–but lots of it at least. Thanks for any info. Would love to make this work for us, but don’t want to get in over our heads, financially.
dar
in Real Estate - General 13 years and 2 months ago
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bellapenn | 13 years ago
This is a good thread since I’m also buying a house.Thanks for your advices.Well, at present economic crisis/recession,its really hard to invest and spend wisely.However,weighing the pros and cons of buying a house will be a good idea.I have also read recently that individuals younger than 35 has hit particularly hard, with joblessness numbers double the national average. For 20 percent of parents of young adults, the challenging economy has been one aspect in their conclusion to help their children buy a house. I just came across this article: More mothers and fathers helping their adult children buy homes .Parents are indeed concerned of their children’s future.
pigthree | 13 years and 2 months ago
Masterbuilder makes a great point. In the area you are searching, many people bought & over paid at the height of the bubble and are now “under water”. Do your research, its all public information – you can find out when the owner purchase, for how much, and how much was financed. Factor this in to your negotiations. Also look at other areas like Augustiner suggested. The housing stock is much better and conditions of the homes are gennerally bettter. Asking prices are more realistic and for the most part there are still houses that are not just a “flip”. The same conditions might still apply as many owners in these areas “refinanced” during the bubble to unfavorable conditions for some quick cash. So, you could find a better house needing less work for a lot less money. imo, the areas your searching are over hyped anyway. costs can vary widely. even from capable arechitect and contractor. meet lots of them. there is not as much work out there as in years past. you can negotiate with them as well. if you are willing and able to take on the responsibility of the project, consider hiring a construction manager that will show you all costs and help you choose and manage the subs. The reality is, that a general contractor gives you a flat fee and then looks for way to save money. The architect is supposed to protect you from substandard work, but this usually happens too late and things tend to go bad from there.
masterbuilder | 13 years and 2 months ago
I’ve helped clients find houses in Brooklyn. Look around. One house that had been on the market a few years ago for around $750K went for around $300K on a short sale, and the clients only had to put minimal renovation money into it to add a bathroom, do repairs, paint and refinish the floors. Their architect got the Alteration 2 plans approved in about a week.
callalily | 13 years and 2 months ago
Go to open houses in the area you are interested in. It will give you a feel for the market. As for houses that need extensive renovations, generally the seller will list them at market price minus an optimistic renovation cost with no extra thrown in for your time, trouble, risk, or cost of living elsewhere while the house is under construction. If the house lacks plumbing, heat, kitchens, bathrooms, a roof, or other necessities, no bank will give you a regular mortgage for it, only a 203K (construction) loan. Once you are in contract, you hire a house inspector who is also an engineer to tell you about the structure and mechanicals of the building. Hire someone independent, not somebody suggested by the real estate agent. If the inspector uncovers serious issues, you ask the seller to come down on the price. (In most cases, you don’t ask the seller to fix it — too risky.) It costs about $900 to hire an inspector, so you don’t want to do it more than a few times.
wherebklyn | 13 years and 2 months ago
I did a lot of research on past postings on the Brownstoner forum to get a rough idea of renovation costs. Also wider searches on the web. Then, I came up with rough estimates for how much to budget for each major renovation/remodel task — kitchen, bath, floors, walls/ceilings, basement, etc… For example, $30K kitchen, $20K bath, $25K basement, and so on. We’ve gone to at least a dozen houses now. I already know the price range that I’m looking at, so I don’t bother with the $1M+ listings. At each house, when we like them enough, I make notes of what areas need work and then add on my renovation guestimates to get an idea if we can afford to put in an offer. (Also, we’re comfortable with doing multi-phase renovations over 2 years knowing that my estimates will change.) We have yet to bring an inspector/architect/gen contractor. We would only do it when our purchase offer is accepted. Obviously the inspection must be done before closing. And most likely we would wait until the contracts are signed before paying for estimate fees.
dar | 13 years and 2 months ago
Wow. thanks all for the great info! Greatly appreciated. cheers!
fractalogical | 13 years and 2 months ago
Also just in case you are not familiar with the public resources available online, there are a number of sites you must research before considering a purchase, including the BIS on DOB which will show any unresolved violation$ and what the official use of the property is considered to be, HPD online for property information and other outstanding violations, and ACRIS for official property documents (deeds, liens, etc.).
jparnass | 13 years and 2 months ago
The estimates above are a good starting point. For anything that really needs “a large amount of work” you should budget at least $150-200 per square foot and easily more. I would strongly recommend that you have an architect accompany you on a walkthrough once you have decided to put in an offer. A detailed building inspector report will give you more information, but you should be able to hold off on spending the money for one until you have had a first pass with an architect who can point out any major issues and give you construction scope estimates. I would be happy to meet with you once you have narrowed your choices. We have extensive experience with modern townhouse renovations. Jordan Parnass AIA LEED AP http://brownstoner.staging.wpengine.com/jordanparnass
slopefarm | 13 years and 2 months ago
You sound new to this. In your shoes, I would chat in advance with a few architects and contractors to get a general ballpark range on a per floor or square foot basis what to expect in terms of reno costs and what the major variables are (new plumbing, new electricity, how many kitchens/baths, moving/reconfiguring, structural work needed etc) and how much those items will alter the costs. Again, very rough basis. Often, until you can look behind walls (generally not until after closing) you don’t know what you are dealing with. Figure out where that puts you in terms of affordability — how much you can spend on house and how much you will need for reno, so you know your price points. You will not get the degree of accuracy or precision in these matters that you are seeking, so make sure you factor in a substantial reserve for surprises. Do not work right at your limit from the get go. Then, I would see a house first with no professional. If you seriously like it, and can afford it within the general range of reno costs, then go back and see it with a contractor or architect to get a sense of how much mroe or less that house will need. My inclination is to go with a contractor, not an architect, if your concern is price accuracy, but make sure to ask the contractor what is isn’t counting (i.e., stuff you buy, architect’s fees, etc.). Again, you will get a rough, very rough, estimate. (PS This is an instance of “do as I say, not as I did”.)
Augustiner | 13 years and 2 months ago
Ok these are just rough numbers, but I think that´s what you want to know: nobody will come to all the places you look at.
Look at 10-15 places and once you really like a house then you bring the people.
prices are starting at 500-600 k for the house, depending on how much of a house you want + 100.000 per floor reno cost if you looking at a real reno.
If you do stuff yourself, and you are OK with leaving things as they are, the reno cost is probably significantly less, but 200 k will most likely not get you further than 2 floors if you include soft costs like architect, expediters and such. bring a capable General Contractor and it´s never wrong to have an inspector make a building report once you seriousely consider buying it.
The inspector will tell you about things like floor joists and the structural integrity of the house (which the GC can tell you as well in my opinion – save some money here)
He will not tell you how much the renovation cost will be or if it´s worth buying the house.
The Contractor knows what you need to fix and what´s outdated.
The Architect will tell you if you need to file permits.