I met with a young man that bought a home back in 2014. He bought this home as a “short sale”. The seller was having trouble selling it because it needed a lot of repairs and he didn’t have any money to fix it up, so he negotiated with his lender to sell the home “short” of what he owed.
On the surface, buying this $150,000 home for $135,000 may have seemed like a good idea at the time to this young man, but when I visited his home this week there were still a lot of repairs that needed to be made. After living in this home for three years now, he’s done some repairs as his income would allow, but now he’s being transferred out of state and needs to sell. I had to tell him, “I can’t sell it in this condition. No one will buy it.”
Unfortunately I’ve seen this situation too many times. What may look like “a deal” can actually turn out to be a nightmare in disguise. When we’ve had clients like this in the past, I’ve told them, “If you don’t have a lot of cash laying around, then don’t buy a home that needs a lot of work.” Too many buyers think they can do all the work themselves to save the money, but they always underestimate the actual cost of time and money involved.
In this case, the young man decided to remodel the kitchen first. Even though it was a perfectly good kitchen to begin with, he didn’t like the layout so he ripped out all the kitchen cabinets and bought new ones. He also decided to spend several thousand dollars on brand new, high end, stainless steel appliances. Unfortunately, he broke several of the floor tiles while installing new cabinets, so he then had to replace the tile floor too.
When I previewed the kitchen this week, it was beautiful and everything was brand new. Unfortunately, the two bathrooms are still straight out of 1971, the in-ground pool needs a new liner and pump so he’s not using it (picture green pool water), the carpet is very old and stained, there are places on the ceiling that need to be patched up and repainted because of a previous roof leak, and the wood deck is rotting away and quite honestly, I was afraid to step on it.
I wanted to kill his previous Realtor for letting him buy this piece of junk, but it’s probably not entirely her fault. I’ve had buyers like this before, and they watch too many home improvement shows on HGTV. Everyone fancies themselves a “home flipper” and no matter what you say to them, they think they can do it themselves.
If you haven’t watched this older Tom Hanks movie, The Money Pit, you need to see this. It really captures the essence of what you could experience when trying to fix up a house. Here’s a clip.