Offer on Historic Home - help!

17 years ago

Greetings, everyone.....please tell me what you'd do!

1. Found an old victorian home that makes my heart go pitter-pat and thump-thump. Great lot, about 10 acres, in the country but still only 30 minute drive from where I work. House is on the National Register.

2. House is listed by Preservation society. Seller inherited property, lives in very expensive real estate area about 5 hours away. (NoVa)

3. House is intact in original condition (never subdivided or whatnot), but need to be completely, totally, rehabilitated. E.G., it needs new roof, new electric, new baths, new kitchen, you get the idea. Has original plaster walls, floors, doors, mantels,etc. Eight fireplaces, all the chimmneys capped.

4. Main probs - roof is leaking in one area and needs to be replaced ASAP; also a previous owner removed one of the foundation piers (to add furnace) and the house is stressing as a result. Stresses noticeable are mainly cracks in plaster and a bulge in one wall. House needs to have the pier replaced and foundation reinforced to correct the problem. Both of these problems need to be addressed immediately to stabilize the property. Even with this problem, there is only a very slight give in the floor, however - the house was extremely well built.

5. I hired a structural engineer and architectural firm, both specializing in historic rehabilitation, to inspect and give me a rough guess-estimate as to the cost to fix problems, and propose how the other pieces could be done in stages for budgeting.

6. The contractors came back with price guess-estimate. Price to DO the rehabilitation is within 50K of price that seller is asking! Here are the details:

The seller is asking $625K;

Total rehab estimate came in at $575K.

Note: Land tax value is $80K. House tax value is $90K.

6. So, seller's asking price is as if the house were already completely rehabilitated. One reason (I suspect) is that unless you look really closely at the property (as the engineer did), in general it looks to be in much better condition than it actually is. The plaster is in good shape generally; the cracks in it all radiate from the pier-removal location.

7. House is 3500 sq feet.

8. Median house price in area is $225K, but rising steadily. About the time I finish the rehab (10 years?) the property should be worth what the seller is asking NOW. There are some other old victorians in the area that are selling in the $500K range. But - they are already updated.

Would you offer, and if so, what?

Assume you are in love with the property...as I am...

Thanks in advance....

SailorGal.

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Comments (12)

Carol_from_ny
17 years ago
Whatever your estimates for repairs double that price and the amount of time you guess it will take to do it. Old houses have a way of surprising even the most experienced rehablitation specialist with unforseen problems.
I'd also suggest you read thru some of the post on this forum to see what you are getting yourself into. Love can turn to hate real fast if you and yours are not totally in agreement and prepared for life in a old house.

As for what to make as an offer. Have a candid talk with your real estate agent. As much as they drive me nuts they are usually pretty intune to what the circumstances are for the properties they are representing and often have good insight as to how low a seller is willing to go in any particular circumstance.
vjrnts
17 years ago
It sounds like they have set an absurd price on this property. I would lay out for their agent why it's insane, let him/her know that I'm interested but they'll have to come down about $400K, and then walk away.

Love is one thing, but this could be like being in love with a junkie who has no intention of cleaning up; love turns to hate real fast, and with the numbers you're quoting it's unlikely that you'd even get your investment back, much less any increase if you decided to sell before your 80th birthday.
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ericwi
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bulldinkie
17 years ago
We bought this house 1700 brick farmhouse.It was pretty run down.We completely restored it,new electric,new plumbing.We had a fellow come in go over everything and tellus what it was worth. About a year after we moved in.It more than doubled its value.Can only imagine what its worth now.With price of homes,land.
radioguy4ever
17 years ago
old houses are hit or miss... lots of un forseen problems around EVERY corner...our home is 115 years old and it was more feasible to renovate it rather than restore it... in our master bedroom we found a "frankenstien wall" where it was built using PIECES of 2x4's... pretty scary stuff!

if you buy, good luck and hopefully you have a fat wallet and alot of patience.
powermuffin
17 years ago
I would walk away from this one. It just doesn't make sense financially, unless, as previous poster hinted, you have money to burn and don't want to see a financial return.
Diane
bulldinkie
17 years ago
One reason we did ours was we did some of work ourselves,electric,plumbing etc hubbys a builder.We pronbably would not have done it otherwise.The guys that did restoration arent cheap by any means....But between them &hubby and 2 sons we got what we wanted.
tehegemon
17 years ago
Personally, I would walk away from this one, but that's me.

I suspect the seller or her/his agent is appealing to an out-of-state buyer. The notion of real estate "value" is highly subjective. In our area, one can buy a completely restored magnificent historic home (on local and federal registry) for a fraction of what an unremarkable average home would cost in areas such as San Francisco, Los Angeles, DC, Boston.

Our wiser real estate agents figured this out and jumped on the relocation bandwagon, artificially raising prices to increase all values in general, while remaining beyond competitive to residential real estate in primo parts of the country. It worked, but only temporarily. People flocked here from other parts of the country, thinking of themselves as being centrally located to Boston, New York, and DC; although, what they gained in charming historical architecture they lost in their immediate neighborhood. When one buys a home, one also buys into its immediate surroundings.

As a quick aside, our historic home (listed on both local & federal registries) makes my heart go pitter patter as well, although not as in butterflies in the tummy ~ more like the verge of a heart attack! Restoring an old home demands a level of patience I clearly lack, as I had hoped we would have made greater headway after several years. I know we'll make it, and when we eventually do, I'll ask myself if the past number of double-digit years was well worth the sacrifices we made...heck, I ask myself this at least a couple times daily.

I had hope when we bought our house...I've shifted my focus from the house to the garden, so I can get outside of it and work on something that will produce results within a year's time.

Whoever posted to double whatever you anticipate it will cost to restore/repair is unfortunately right...what we thought would cost us roughly less than $25K to do 5-6 years ago ended up costing us $150K for a substantially lesser amount of work.

Good luck with whatever you choose.
sarahandbray
17 years ago
Oh man...that sounds high! I would talk to two or three local real estate agents about the property. Sounds like there's a LOT of work to do and a high sticker price. Two negatives!!

I would walk away from it unless the real estate agents and the seller could come up with a more reasonable price due to the estimated cost it would take to work on it.

Good luck!
(any pics, by chance?)

Sarah

-Sarah
Sully6
17 years ago
I would walk away from a house like this. It sounds to me that the property should be priced close to land value only, especially if similar updated homes are selling for $500K. Since the seller has priced the home so unrealistically, I'm not sure how successful you'd be at reaching a fair price with him.

I would also be concerned that you could be risking your financial future (unless you vast sums of cash at your disposal). Wonder if circumstances change in a few years and you have to sell? You could lose a lot of money.
sharon_sd
17 years ago
Make an offer for what the house would be worth rehabilitated now, minus the cost of getting it there. Do not go higher just because you love the place. Make sure your agent takes the engineering reports, so that the owner is obligated to reveal the major defects in a disclosures statement. This will mean that any other purchasers in the future will not be deceived into thinking this house is in perfect condition. That way, it will not sell for any where near the asking price.

Your offer will probably be refused. Have your agent tell the owner that if they decide some time down the road, that they want to sell for your price, you would welcome them coming back to you, and you will consider their offer.
Pipersville_Carol
17 years ago
Your $575k rehab estimate sounds really high to me. I had to go back and read it a couple of times to make sure I wasn't mistaken.

I'm finishing up a $200k rehab right now, and believe me it was extensive. All new HVAC systems, new kitchen and baths, garage conversion, barn upgrade, large new garage, $18k of fencing, plus a zillion other things like flooring, landscaping, windows, roofs, paving, septic repair, etc.

Prior to this project I updated a Victorian for about $80k. New kitchen, roof, bathrooms, fencing, central air etc. Admittedly, that was ten years ago and didn't involve the foundation, but still it's a long way from the figure you were quoted.

I would think that with $575k you could fix up an old house AND put on a new addition.

Offer on Historic Home - help!

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