Buyers Developing Aversion to Renovating
When the market was booming, buyers were willing to take on renovations in order to get a better deal. These days, however, fixer-uppers are demanding steeper discounts to their move-in-ready brethren, if they’re even selling at all. “Buyers don’t want to do any renovations right now,” Halstead’s Amelia Gewirtz told The Real Deal. “I have…
When the market was booming, buyers were willing to take on renovations in order to get a better deal. These days, however, fixer-uppers are demanding steeper discounts to their move-in-ready brethren, if they’re even selling at all. “Buyers don’t want to do any renovations right now,” Halstead’s Amelia Gewirtz told The Real Deal. “I have people saying, ‘I don’t even want to have to paint.'”
THL – yes, of course, the question always is “can i afford this house?” and i agree that there are always unknown costs that one, ideally, should be prepared for in calculating one’s ability to afford a home. rightly or wrongly, i am willing to bet that to most first-time homeowners, the potential financial (and other – sourcing and doing work yourself isn’t free) risks of new/renovated construction seem both lower and more calculable than those of an old home needing renovation.
as you point out, this is based on lots of assumptions that may not be true in certain cases. and obviously the cost/benefit analysis will change as the discount for unrenovated (and the markup for renovated) homes rises.
One difference is people need a higher down payment and previously that was used for the renovation. Can you increase the amount borrowed to include the purchase price and renovation price?
“I disagree”,
To me that boils down to can you actually afford the house or not?
Just because someone painted and put some new fixtures in the bathroom doesn’t mean that the pipes in the wall are sound. Or that they used the proper backer board behind the shower walls. What it does mean is that you are paying for those new tiles and paint. In fact, you’re paying a marked up cost for them rather than sourcing and doing the work yourself.
With a renovated house there are just as many unknowns as with a fixer up.
people are justifiably loath to take on any uncertainties right now. hidden potential is nice, bargains are nice too, but with a fixer-upper there’s a huge downside possibility of starting a renovation that you maybe can’t finish because of unforeseen problems, cost overruns, job loss, you can’t get a HELOC or it gets capped, etc.
BRG and THL;
Well said. Who in their right mind would lock themselvs into a mentality that states “Because things are bad, I’m not even going to paint”? Indeed, it seems to me that during times like these, one needs to be more flexible than usual.
Lots of unhappy buyers in a few years when they find out the hard way what wasn’t renovated behind the walls in those freshly painted flipper jobs.
I agree, BRG. Leave it alone. I’d rather fix it myself, and know how it was done, than trust a quickie fix by someone just trying to unload the property.
This sounds so ridiculous. You either like and want to purchase the home or you don’t. The renovation/maintenance factor is nothing more than a bargaining tool.
Personally, I’m with Snark. I’d rather pay less up front and do what I want to the place than buy someone elses version of “nice”.
Basically, I’m not going to repay you for the cost of a Viking Stove and Euneos Cabinetry when I would have gone with a Blue Star Stove and Thomasville cabinets.
Oh yeah, I’ve seen some real, shall we say, “taste-specific” renos.