A few years ago, we started out to build our dream house. We added about 3000 feet to our existing home . a 60’s California Contemporaty in Metro Denver Colorado.
We’re about 75% finished…with most of the remaining work being stain – paint – floor covering – one shower to tile- landscape – fireplace to apply final finish <Stone – tile?>
Now we’re faced with having to relocate. We know we won’t recoup our expenditure…besides the remaining work, we’re overbuilt for the neighborhood…but we need to come out somewhat over our debt on the house.
A few details:
Garage – over 850 sq feet – just under 12′ height – installed two post 9000 lb vehicle lift included
Kitchen – Approx 750 sq feet – 3 islands – Tray Ceiling – Wet Pantry – 4 sinks in all – appliances included.
Three Master Bedrooms – 4 full and 2 partial bathrooms in all – 5 bedrooms in total – 2 Gas fireplaces – Laundry Room – 200 sq ft Dressing Room with sink – 2 additional walk in closets – total over 4600 sq feet plus the garage and partial basement <10 foot ceiling>…and on and on. We’re living in all the space at this time.
So – the question is – has anybody here ever bought or sold a house in this situation? Would we be better off to finish more – and thus have to get more – or offer it as is for a person to do their own staining – floor finish – carpet – and so forth?
We estimate we’d have to spend – since this needs to be done fairly soon – around $15,000 to get pretty much finished – a project like this is never really finished is it? – if we were staying and doing it mostly ourselves the cost would be more like $10,000.
But is we put the 15 in it to go for maximum sale price, we’d need to sell around $475,000, as that would certainly require a realtor and their 6%.
We’d take $438,000 as is today.
<sigh>
Any thoughts?
Peter
Replies
We estimate we'd have to spend - since this needs to be done fairly soon - around $15,000 to get pretty much finished - a project like this is never really finished is it? - if we were staying and doing it mostly ourselves the cost would be more like $10,000.
One issue
Seems to me you would want to contact a local contractor(s) and get an actual written bid(s) for completion of the work. This would probably help the buyer make a decision. You would probably need to pay the contractor something since the bid is only a tool of yours to help with the sale. Of couse he may get the job with the new owner.
We'd take $438,000 as is today.
I guess you would . I guess you can dream.
Thats not how it works .
So you are allowing 5,000 labor to finish it huh?
Tim
You almost certainly need a realtor to help sell your house, unless you're in a very hot market with multiple offers over asking and sales occurring within a few days of going on the market. If that's the case in Denver, then put together a website, a brochure, and a yard sign, get an MLS listing, call every brokerage in town and tell them you're on the broker's tour (find out when it is...), and throw ads in the papers and on craigslist too.
We sold our last house without a realtor. It was in a hot market. It was a tremendous amount of work and a lot of stress. I had a client who is a very sharp attorney at the time and he kept us lined up.
Even if you do sell it yourself, you'll probably pay 3-4%... the 3% to the buyer's realtor, and at least 1% in other costs you incur. Your chances of finding a buyer that is not represented by a realtor are very low. On your sales materials make sure to list prominently that you are paying a 3% commission to the buyer's agent on closing.
Most realtors will tell you that people don't want to buy something that needs much work. The stuff you're listing is borderline. A contractor might buy it if s/he thinks a flip is possible. I'm not sure about the Denver market, but in most places a buyer with nearly $500K doesn't want to have to finish the job, they want turnkey.
Anyway, sounds like you need to cut and run. Find out who the heavy hitter realtors are in your area and sign one up.
We are/were in the same position that you are faced with. My wife took a job in another state and I stayed back to finish the home myself. This was basically all the work done myself. What I did sub out was a real mistake and I wound up redoing most of it. The drawback to completing it myself was the amount of time it took.
The reason for doing this other than previously mentioned is that trying to get anybody(contractor/sub contractor) to do the work was that if they were any good, they were booked for 6-9 months out. The other was that we had a very tight budget to get by on until that house sells.
The real estate agent we chose to list with us refused to put it in the MLS until things were done, except for the paint touch up and a few others things.
Her reasoning was that we were marketing our home to the higher end clientele and that is a smaller market . To not have the home completed made that group of possible buyers even smaller. If we didin't finish everything, she figured that we would need to sell the house at least $30k less than what it would take to finish it(in other words around $50-$60k below market)
I had decided to put in a few more cabinets and told one person looking at the house(lookie-loo) about them and she could not picture it. Once they were done, her comment was that they looked better than she expected. We lost a sale on our home because ours did not have a dock, the other one did.($2,000 cost)
The landscape needs to bring in that "curb appeal". Otherwise, they just drive on past. And, for the estimate that you have left in materials, I'd figure the labor would 3-4 times what the material cost would be(just a wild guess)
Wow. These three gentlemen just gave you excellent advice. Follow it to the letter. I was in a similar situation with an income property I used to own and wish I was part of this forum at the time because their advice would have saved me a ton of time.
All I can say is "ditto".
The CM
Used to be a Realtor, not that I developed enough experience at it to mean much. Those I worked with that did know how things work, would suggest that you finish everything so it looks finished, and stick to boring ordinary colors. You'll never get extra money for nicer carpet, so just stick to the basics.
I was always impressed with the number of owners who could sell their house without a Realtor. Of course some of those buyers paid too much, and some sellers sold for under what they could have made. There is little risk trying to sell it yourself unfinished then listing it when completed since it will essentially be off the radar of 95% of the Realtors until, or if, you end up listing it with someone. It would be worse to list it unfinished, then raise the price when it is finished.
Personally, I'd have a cheaper carpet installed, finish the paint/stain and try to sell as-is by yourself. A good selling price might be your bottom line plus the cost of having someone else finish things with an allowance for the unfinished items so the cost of completing them for the new owners can be wrapped into the mortgage.
If you don't get a good response then finish the other things and list the house with a Realtor. However, Denver is full of young folks with HD credit cards who might not be as worried about a partially finished house as would others in more conservative areas.
At least that's the view from the cheap seats. :-)
Don
I tried selling a partially finished house once. I got zero offers. No one even came back to look a 2nd time.
The realtor told me that people tend to NOT have any imagination, and don't want to put the effort into finishing a house.
I would suggest that you first hire a realtor to assess the situation. Someone local wiull know the most about your area and can provide some first-hand suggestions.
Then I'd consider hiring a contractor to finish it, and sell it that way. (Unless the realtor advises you otherwise)
A few details:
Garage - over 850 sq feet - just under 12' height - installed two post 9000 lb vehicle lift included
Kitchen - Approx 750 sq feet - 3 islands - Tray Ceiling - Wet Pantry - 4 sinks in all - appliances included.
Three Master Bedrooms - 4 full and 2 partial bathrooms in all - 5 bedrooms in total - 2 Gas fireplaces - Laundry Room - 200 sq ft Dressing Room with sink - 2 additional walk in closets - total over 4600 sq feet plus the garage and partial basement <10 foot ceiling>...and on and on. We're living in all the space at this time.
A "California contemporary" with the above selected features? In Denver? At $450,000?
Besides the great advice the others gave,
What the heck are these features going into basically an average priced house?
My snobdivision (homes $750K up to 1MM) in SW Littleton has nothing close to this description. Across the fence in the Polio Reserve, they will - for $2.5 MM.
You're building something so far out of line with comparables...
First off - thanks to all for the input - it's all good - even that which is harsh :~)
With regard to Peteshlagor's comments - all true.
We liked the house we had - we like the neighborhood - on the east side of BowMar - we have a friend who's a California custom builder who had moved here...he wasn't working at the time - we did most all of it ourselves with a pickup crew when needed - so we paid time and materials not a contractors mark-up - we knew we were over building for the area....we expected to be here long enough for the market to rise around us at least partially...there have been 5 other expansion projects in the area since ours...this move is just unexpected.
But that's what I think could be our strength. You won't get the features this house offers anywhere near its price in the "appropriate" neighborhoods. With the terrific garage and kitchen it's really great for people who like to do things themselves. All the heavy lifting is done - it's about the finish.
The advice to get a realtor to do a comp is good ... doing more of the finish is also good...for less than $6000 the entire top floor would be finished...another 6 or so should go a long way to making the main floor at least look "done". With that I'd need to see closer to 450...but that still leaves room in the price for the rest. A friend who's an appraiser believes that $475 - finished - is the high mark in today's market...which is why I got to thinking that selling at around $435 or so pretty much as is would leave room for the next guy to wrap it up and have a terrific house for way less than they otherwise would. Doing it that way would allow the right person to do things out of pocket over time as well.
I've attached two photos to give an idea what we've done.
Peter
What's the outside look like?
I've attached a photo of the exterior - taken just now - a bit dark I'm afraid
There are some things that have to be done to tidy up the exterior presentation...stucco on the east wall - a new front door - we had been holding out for a custom round door but now we'll be going with something nice but not spec built.
Stuff -- Huh? Ya think I'm over stuffed? - yeah. Indeed. I'd like to offer it totally empty. We're probably going to end up in a house half this size ... What I'd like to do is rent a hall - take everything out of the house - into the hall - lay it all out - select what we have to keep and have the rest auctioned off on the spot.
Bringing in more upscale rental furniture is a good idea!
What I need is one of those home make-over shows :~)
Peter
Nice house. I'll give you $450,000 as is, but you'll have to move it to Pittsburgh.--------------------------
It's only satisfying if you eat it.
I have a policy here at BT - I don't download any pics that big unless they have Pamela Anderson in them.Any chance you could make 'em smaller for those of us on dialups?
Last time I tried to make love to my wife nothing was happening, so I said to her, "What's the matter, you can't think of anybody either?"[Rodney Dangerfield]
Smaller Photos attached..
If I moved it 10 blocks West I could get over 1 million :~)
Peter
I didn't mean the pics should be quite THAT small. Something on the order of 800 X 600 and/or 100K or so in size is fairly easily downloadable.
The Beatles said All You Need Is Love and then they broke up.
The advice above is acurate. I am not a realtor, I am an investor. And as John Sprung said people like me smell blood in the water on these deals. I figure if you have to move I will wait until you are tired of making the payments after you move, offer you almost nothing and get you to take it. The only time I see one of these elephants sell is if someone who is in the business wants to buy it for himself and his family. But investors still won't over pay for a neighborhood because they know it won't pay off.
And 99% of regular people won't because they can't get it financed because the comps in the neighborhood won't allow the value to be high enough to get 90% financing. Good luck. But if you really have to sell I would get ready for a bath. DanT
Boss,
I am out in the country. The only thing avaliable is satilite internet.
Try http://www.wildblue.com. I have it and it is working well. They offer a nice package for $50.00 a month, much cheaper equipment / install and monthly charges than DirectWay.
Nice home, but it looks like it is overbuilt for the hood.
When you get it set up to sell, bake some bread on the days you show the house.
It is an old realtor / sellers trick for putting a comfrotable and down home smell in the house.
Some of the post verify my advise to get writen bids from one, two or three contractors to finish the work. It may work for an industrious buyer.
Edited 1/17/2006 6:39 pm ET by txlandlord
Those photos remind me of something. When we started getting ready to sell our last house, we moved more than half of the 'stuff' out of it. We got a storage locker and moved furniture, knick-knacks, doo-dads, and all sorts of stuff out. We had an $1100 garage sale. We bought a few really nice furniture items and did our own staging.
You're going to need to strip your place down quite a bit. People need to be able to imagine their stuff in your space.
I just got finished running the same sell-unfinished exercise. What happens is that the real estate sharks smell blood in the water, and they'll only offer you the equivalent of foreclosure prices. So, I'm not selling. The only sane course is to finish the job.
-- J.S.
I'm a realtor and I find most people have little or no ability to perform remodeling and home repairs and most seem to want a home that is "move in ready". If the home needs repairs the common assumption is that it will cost a fortune to hire a contractor. Many people around here live paycheck to paycheck and it's all they can do to purchase the home. I think it's difficult to sell a home needing a lot of work.Having said that, there are mortgage programs where the bank will loan money for renovating. I think a lot of people are unaware of these programs.If you need a realtor and don't have anyone you're familiar with email me and I will give you the name and phone number of a competent realtor I know in Denver. He's been in real estate in Denver for 20 + years. Plus he's my brother, but don't hold that against him.You can email me at [email protected]Good luck!.++++++++++++++++
-Do the thing you fear and the death of fear is certain-
Bite the bullet and finish the place out.
Bosshog is absolutely correct, buyers have no imagination and your chance of getting a fair price is zero selling "as is".
Chris