Maryanne,

There are as many answers to your question as there are people...no 'one-size fits all'.

In my area, however, houses that have not been updated are not selling, period. No matter what they are priced at potential buyers subtract remodeling costs from the list price without consideration that the need for updating might be already priced in. I have many friends within the real estate & mortgage industry. They all say the same thing...people are tired & don't want a major project house. The flippers seem to have abandoned our area...at least for now. The lookers are people searching for a place to call home.

In general answer to your question, I don't believe in going into debt in order to do extensive remodeling on a house that one is going to sell. IMO, it makes better financial sense to lower the price enough that it sells 'as-is'. My reasoning is: If I incur debt remodeling...what happens if the house still doesn't sell or doesn't sell at the price point I'd hoped? The answer is that I end up with the DEBT AND THE HOUSE. Not a good scenario. If I pay cash & upgrade according to my tastes then it's not so bad as long as the cash expenditure was appropriate to my circumstances. Then, at least, if the house doesn't sell I end up with a remodeled home.

/t

We were specifically looking for a home that needed a lot of cosmetic work.

Why? Well, yes, we did want to customize it to us, but more because we could buy more 'bones' for the money and DH is a skilled remodeller. IMO, people who want houses that need work want them in part because they cost a lot less than houses that don't need work.

How much is a lot? Our house was a corporate relo that had been appraised 10 months earlier by three different companies, and the average appraised value was $575. (Healthy, rising RE market) The house was dated and needed a lot of work. After sitting on the market for over a year (average DOM about 90 days, popular neighborhood), we were able to get it for $435. So a $140K discount (25%) for "as is"...

If the kitchen & bathroom were in decent shape to begin with and the bathroom did not have those small tiles on the floor, I would consider buying something like that.

I've been to a few homes where the layout was decent but they already remodeled the kitchen in such a way that it was not user friendly. It looked like a man that never cooked chose what went where. With the bathroom, they chose colors that I didn't like.

Had the price been right without the remodels I would have considered them.

In our younger years we preferred to buy houses that were outdated or needed work. We'd get the houses at discounted prices and do all the work ourselves since we have the skill and know how to do the renovations.

Now in our later years, we don't look for a house that needs as much work. We'd rather be able to move right in and only do cosmetic changes like paint etc.

I think you'll still find both kinds of people out there, those that want a house already done and those that want and expect a BIG DISCOUNT to renovate the house themselves.

If he is wise and the renovations a seller does are not extreme for the home or the neighborhood, he can recoup a substantial portion of the renovation cost by expecting a higher price for the home. However, some sellers go overboard and overimprove for their price point and will end up losing in the end.

thank you all for your responses, very much appreciated. this guy is putting way too much into this house and will never recoup, although he's of the opinion he will. i could understand it if he was doing his own work, but it's a constant influx of contractors and workers. something tells me by the time he's done, he'll stay LOL it's funny too, it's things that should have been done over the course of the time he's had the house.

thanks again
maryanne

Maryanne, I won't get all the money out of my house that I've put into it making upgrades over the years. But I was making those upgrades FOR ME, to enhance my living in the home. (And, at the time, I expected to live here for 10 more years... lol). But now that we're moving, my husband's one requirement was "can't need to have anything done to it." Bless his heart, he's lived through 4 major remodel phases on this house and he's DONE with that.

Just as a car dealer "details" a used car before advertising it, a seller will get more for a house that has been shined up. The car dealer isn't replacing the engine -- just increasing the eye appeal. The home seller comes out ahead to do the same cosmetic work.

How many people have spruced up their home for sales appeal only to say, "Gee, this is really nice! Why didn't we do this sooner when we could enjoy it?"

As a frustrated buyer its about the price. If you look at a home that is priced for what it is and can see putting money into whatever needs to be done will be worth it, it should sell, at least eventually.
What doesn't work is when a buyer goes to look at a 200,000 house and thinks
I would need to put 20,000 into this house but it won't be worth more than 200,000 no matter what for at least the next 10 years because at whatever price and condition its still a 2000 sq ft home in X region.

My pricing / thinking as a buyer - I know what my area is selling for and that I can buy a brand new house in the same school district for $100k+ more. If I go to another school district, actually where I've been mainly looking (still the same county) for $100k I will get a house in worst shape then mine on a smaller lot with higher taxes. IMO if these sellers lowered their price some, I might consider buying. If they don't lower then they need to make it show better.

I totally agree with marys1000 - it is about the price - and truth in advertising.

If you priced the house AND when doing so honestly took into consideration the cost of updating the property - then why do I find so many sad little houses, in sad shape priced above the comps.

Buyers are not fools either and can read comps too.

MP