Selling house

[LeavingSD]

Hello,

I’ve been a reader of this forum for years but haven’t had reason to post until recently.

My husband and I have decided to relocate to the bay area. We own a house in Penasquitos that we bought a little over 8 years ago. Probably the worst financial decision either of us have ever made (I found this site after that purchase). At this point, we have maybe 75-100k equity, but the house needs cosmetic work. The kitchen is in terrible shape, it needs new carpet, hardwood floors could use a refinishing, and probably some interior paint. We had planned to remodel the kitchen early this year as we’ve saved enough cash to do so, but I feel like that is a silly thing to do given that we want to sell the house, not continue to live in it. We aren’t against keeping it and renting it out (we now, after several refi’s, have a good, affordable mortgage), but even to do that, the work needs to be done.

My dad suggested that we hire a broker and let him/her assess what needs to be done to get it sold, and let them handle getting that done. I’m ok with moving (we will rent for awhile in our new city), and letting a broker handle fixes/sale with the house empty – but I’m nervous that if that process drags on too long, we will deplete all cash on hand. I’m also nervous that if we don’t pick a broker that is knowledgeable and efficient this could turn into a complete disaster.

Any advise? Any suggestions for appropriate brokers?

[recordsclerk]

Your house is in a good area and should sell fast at the right price. I would paint and carpet and probably pass on the rest. Kitchen is too expensive and since you are letting someone else handle it, they will probably spend too much.

[bibsoconner]

For a given house, it’s impossible to say definitely that fixing up the house results in a higher sales price that more than offsets the cost of the improvements. For that, you’d need two parallel universes where you do the improvements in one, and not in the other. That said, my gut feeling is that it often is worth putting some money into cosmetic things. Cracked floors or counters in the kitchen that might cost $4000 to fix might very well put a lot of buyers off even putting in an offer. Curiously, telling them that the roof is totally shot and might cost >10,000 doesn’t even phase them. I think it’s a case of things that are “in your face” have more of an emotional impact. So, I would take care of cosmetic stuff. That doesn’t mean do the best job possible. Perhaps nice, neutral linoleum and cheap cabinets? I was in your position and did the improvements, and while it’s hard to know, I really do think we more than recouped our money. I got to say though, I was sort of bummed when I heard the new owners were going to rip out the kitchen anyhow. Also, don’t forget the easy things: clean screens, remove overbearing plants (that you might love) and create space.

Good luck!

[LeavingSD]

Thank you for the response!

The kitchen definitely needs new cabinets and flooring. I’m wondering if I can just offer the buyer a concession?

We have two small kids (ages 3 and 1), so I’d rather move and let someone else handle repairs after we’ve moved out. Is that a mistake?

[FlyerInHi]

Doesn’t sound like you have time or the inclination to take care of fixes yourself, or hire people yourself.

It’s not a broker’s job to fix your house. He will give suggestions.

I would clean it up and sell as is. In this market, it will sell. If you’re not in a hurry, list it high, don’t give it away.

[LeavingSD]

You are correct, I don’t. Thank you for the advise.

Sounds like I just need to find a broker.

[bearishgurl]

[quote=LeavingSD]….My husband and I have decided to relocate to the bay area. We own a house in Penasquitos that we bought a little over 8 years ago. Probably the worst financial decision either of us have ever made (I found this site after that purchase). At this point, we have maybe 75-100k equity, but the house needs cosmetic work….[/quote]LeavingSD, except for carpeting, most of the work which you describe here that your house needs are actually (fairly inexpensive) DIY jobs (some with rented equipment). You won’t be able to recover the cost of having all that stuff professionally done in a place like PQ (esp older PQ on the NW side), and ESPecially if you bought in 2007-08.

You state you’re planning on renting in the bay area. I would definitely fix all the obvious cosmetic problems before marketing my property if I were you to get the highest possible price for your property before you leave. You’re going to need that money because rentals are very expensive in the bay area … even those which are more than 30 miles from SF.

You will likely have some well-maintained and newly flipped properties for “competition.” For example, if you have greasy, worn cabinet door and drawer fronts in your kitchen, you can take those doors off and drawers out and sand them and re-stain and varnish them. You will need to move out your appls (if necessary) and clean your kitchen and baths thoroughly before putting it on the market. You can also rent a carpet cleaner (or just replace the carpet). You can rent scaffolding (if necessary) to paint the interior and exterior of your house.

It sounds like you may have purchased your house with cosmetic defects and never fixed them or maintained your home properly during your 8+ year period of ownership. You will have to pay for any termite tenting or remedial work on it in escrow, which could cost +/-$2K.

I’m sure you know that closer-in homes in the bay area, in general, are older than those in PQ (SD) and need constant maintenance and replacements should you ever decide to make offers on homes up there.

From the sound of your OP, it seems as if you guys aren’t cut out for homeownership. Either you don’t have the wherewithal or patience for DIY, or both. Hiring a “professional” for every single little task which you can easily do yourself is very, very cost prohibitive for the average homeowner.

I am a single female who has owned several homes in SD County in the last ~35 years, both with a co-owner and without. And yes, I do most of my own work myself and have raised kids (even while babies/toddlers) while DIYing and holding down a FT job myself :=0 So I know this can be done.

[FlyerInHi]

BG, in a tight market, there’s not much competition.

Like if you want to buy a good used Honda or Toyota. You have to pretty much pay the asking price.

PQ is a good area. As a seller, I would hold firm on price.

[moneymaker]

Fixing it up will get you a higher price. I personally think it is a waste for the sellers to put in new turf and the buyers rip it out to xeriscape, but hey it creates jobs right! Also putting in beautiful laminate only to have owners rip it out later (happened to me) is somehow just wrong or so it seems. I’ve seen where spending 5k can get you 20k more but one never knows. Banks never put money into a house they sold, but I have seen dumps fixed up really well and if it was my neighborhood that would be want I would want you to do. Personally I would do everything except the kitchen, people are just to hard to predict in what they want for a room that most don’t even end up using much.

[bearishgurl]

[quote=FlyerInHi]BG, in a tight market, there’s not much competition.

Like if you want to buy a good used Honda or Toyota. You have to pretty much pay the asking price.

PQ is a good area. As a seller, I would hold firm on price.[/quote]

I agree. I think the OP should hold firm on price but at the same time, NOT create issues with buyers causing them to pass on making an offer due to obvious dirt, mold, grease, etc. There are two co-owners here! That’s TWO ADULTS who can spend 60-80 hours over the course of a month or two readying the place for sale so it will get a quick offer they will accept and they can move on down the road.

If they don’t do the stuff themselves which just require cleaning supplies, paint, spackling, small hardware, small (or rented) tools, etc., they’re leaving wa-a-a-a-y too much money on the table, IMO. If they just want to walk away after living in it for 8 years (part of the time with young children) and doing nothing to it (like tenants who don’t care if they lose their security deposit), the only type of buyer they’re going to attract is a potential flipper, who will not offer them anywhere NEAR the money they need to come out of this deal with some equity in their pockets. But it will likely be an all-cash offer and will close fast. If that scenario is okay with them, it’s okay with me 🙂

[bearishgurl]

[quote=moneymaker]Fixing it up will get you a higher price. I personally think it is a waste for the sellers to put in new turf and the buyers rip it out to xeriscape, but hey it creates jobs right! Also putting in beautiful laminate only to have owners rip it out later (happened to me) is somehow just wrong or so it seems. I’ve seen where spending 5k can get you 20k more but one never knows. Banks never put money into a house they sold, but I have seen dumps fixed up really well and if it was my neighborhood that would be want I would want you to do. Personally I would do everything except the kitchen, people are just to hard to predict in what they want for a room that most don’t even end up using much.[/quote]Good advice, MM. They will probably need to pay to have the carpet replaced, as well, since that is the cheapest way to cover the subfloor/slab.

It’s none of their concern what their new buyers do (or don’t do) to the place after it is sold. The goal is to attract a qualified buyer who will pay the highest price they can get.

[FlyerInHi]

Does not sound like they want to put in effort.

Learn from the art of the deal from Donald trump. I never read the book but I think it’s about getting the price you want and making an assymetrical deal when you have the advantage.

If they price it high, they will not get an all cash offer from a flipper.

Now is a great time to sell. Take advantage.
If a 1 story house, even better

[bearishgurl]

[quote=FlyerInHi] . . . If they price it high, they will not get an all cash offer from a flipper.

Now is a great time to sell. Take advantage.
If a 1 story house, even better[/quote]Um, brian? If they “price it high” and it isn’t worth that much due to the amount of work it needs, it will languish on the market, sans offers. If this happens, these “sellers” will deplete their savings while living in the (expensive) bay area in attempting to keep up with their PITI/HOA? obligations in SD so as not to damage their credit. Even a tenant will not pay top dollar for rent for a run-down house, NOR will they pay a security/cleaning deposit for a rental house which is dirty … with dirty and/or torn carpeting.

Trump’s “Art of the Deal” doesn’t apply to this particular Joe and Suzy 6p. They purchased their home near the top of the market and may have already accepted a job offer over 500 miles away and need to get their sh!t together ASAP.

OP, why don’t you chime in here again and tell us why you are moving to the bay area and what part of the bay area you hope to move to?

[FlyerInHi]

BG, you may have point. It depends how much in a hurry they need to sell.

But aren’t you one who said, people will make due and live in old, unremodeled houses if that’s all there is?

It is were me, I would price the house only slightly lower than a house that is remodeled.

[LeavingSD]

Hi bearishgurl

I appreciate all of the input from you and others. I do take a bit of offense at your assumption that my home is “dirty” and/or “greasy” and what appears to be an insinuation that we are lazy.

I didn’t think that any of this was relevant to my question, so I didn’t address it, but in response to your comments, my home is clean. We’ve done a lot to improve it in the 8 years that we’ve lived there. We put in new fencing, we rehabbed a broken outdoor kitchen, we put in a patio cover, we re-landscaped the front yard, we put in new pool equipment, we put in a new hot water heater, we put in new ceiling fans, we’ve done work on electrical, etc. etc. The house needed a lot of things when we bought it, many of which we’ve addressed. The kitchen needs a significant amount, something we’ve been saving to do. The cabinets are the original from when the house was built and are falling apart. It is not a matter of resurfacing and painting them. The carpet is old and worn, it is at the end of its life. The hardwood floors have been scuffed and stained as a result of us living our lives in the home. We’ve made a significant effort to manage our resources and address maintenance and improvement of the home in an efficient manner. We would continue to do so if we intended to continue living there.

We are moving because I am transferring within my company. It’s a good opportunity and we have family in that area. I have no illusions about how expensive it is to live in the bay area.

I admit that purchasing this home was not a good financial decision. If you want to judge my overall worthiness to be a home owner based on that, feel free. It’s just not particularly helpful guidance for me.

I do not care what the next owner chooses to do. It does seem inefficient for me to put in a kitchen, carpeting, and paint that I like but they may not. It seems far more efficient to simply credit a buyer for such things or to have a real estate professional advise me regarding what is the most efficient way to address them.

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