Need your collective wisdom
We recently moved into a new custom home out in the country and moved out of the house in which we'd lived for nearly 30 years. My question is about selling the older house.
Some background because I don't think you can give me advice without knowing the situation...
We own the old house free and clear. It is in a booming city that was never hit terribly hard by the housing bubble. However the city has traditionally been pretty much divided by a highway that runs down its middle into "white neighborhoods" to the west and "minority neighborhoods" to the east. The market value of homes on the east side of the highway has ALWAYS been anywhere from 20% to 50% LESS than nearly identical homes on the west side of the highway...even when they are in developments that are virtually identical.
The actual neighborhood in which the house sits was developed in the 60's. It is on the east side but is VERY convenient to downtown and also has easy access to major highways. It was settled by a mixture of white collar professionals (mostly minorities) and blue and pink collar workers (a blend of Anglos and minorities). Despite its age, most of the homes (although not all) have been well maintained. Nevertheless, to realtors the neighborhood has been considered to be "on the wrong side of the tracks" so oftentimes, whenever the original owners sold, realtors would only show the homes to minority buyers or those looking for rental property so, over time the ratio of homeowner to renters went down and about the only Anglos who remained were older homeowners who'd purchased when the development was brand new or their children who chose to stay on in the neighborhood where they had been raised after inheriting the homes. (As Anglos, when we bought 30 years ago, we practically had to fight with our realtor to get her to show us any homes in the neighborhood! I remember her specifically telling us "you don't want to buy there... it's going downhill." We're contrarians tho and we liked the racially mixed neighborhood so bought anyway. Only sold because we've always wanted to live out in the country and could finally afford to buy 4 acres and build...again in a nice racially mixed neighborhood. LOL!)
When we moved out two years ago, our intention had been to do some cosmetic work on the old house and then sell it. It needs new carpet upstairs, a paint job, and some updating on the kitchen cabinets. We had (and have) no desire to be landlords. However life intervened and the cash we'd expected to have on hand to pay to fix up the old house was spent on dealing with a family emergency so the house sat empty for two years. We kept the power and utilities on, kept the yard up, and dropped in often enough that the house did not deteriorate but we simply have not been able to get together the cash to do the necessary sprucing up. And with the mortgage on our new home, we're not really happy about the idea of taking out an additional loan for fix-it-up money. A year ago, we let a friend who'd lost her home in a fire move in while she rebuilt... charging her only enough in rent to pay for the taxes and utilities. She just moved out a few weeks ago.
Then, last week, out of the blue we were contacted by someone wanting to buy the house. (My guess is that they saw our friend moving out and decided that the owners just might want to sell.) We agreed to let them come out and look and they made us an offer on the spot for an "AS IS" buy. We figured it was probably a totally low ball offer from a flipper who figured we were probably desperate to sell. So we told them that we wanted to have an appraisal done before we made any decisions. Turns out that the offer is only about 8% below the value the appraiser gave us for the house "as is." However, the appraiser also let us know that our neighborhood is now one of the hot new places to buy.
Reason? the old city airport which was also on the east side and just south of our neighborhood was moved about 10 years ago and a brand new housing development was built on the old airport land. That area is VERY HOT and apparently the new development's popularity has been enough to FINALLY start breaking down some of the racial bias against neighborhoods on the east side. Young professionals who can't quite afford the steep prices in the really hot new neighborhood have been looking around at some of the nearby neighborhoods and seeing the great deals available. So sales in our neighborhood have been heating up as well.
He estimated that if we put $10K to $12K into cosmetic work, we could ask for and get another $40 to $50K. We had already put in hardwood floors downstairs and remodeled the bathrooms but the upstairs still has carpet (that badly needs to be replaced) and the whole house could use a paint job and it is probably time to redo the roof. Also, the windows are old single-pane glass but we're in a cooling regions and the house is heavily shaded by some huge oak and pecan trees so our electric bills were always so low that it never made economic sense to replace the windows. The HVAC is only about 6 years old.
So, after all that long-winded story, my question...
Would you take the offer? Try to negotiation with the buyer to get him to come up to the "as is" appraisal value? Or turn down the offer, borrow the money to do the cosmetic work and take a chance that you could actually get another $40 to $50K when you have the house ready to sell?
We're leaning toward negotiating but are unsure of the best way to go about doing that. Any advice would be most welcome.