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Who to ask about repairing first or sell as is

Posted by Mike_Platinum (My Page) on
Wed, Mar 23, 11 at 23:43

Hi,
My mom is old and broke. She want's to sell her what I think is an 80 yr. old house in Minneapolis and move to an apartment. The house has a finished first floor, a semi-finished basement, an unfinished attic, and an attached narrow single car garage. She isn't tech savy and has asked me to help. I live overseas. We need help balancing what to fix for the house to sell higher, versus what to leave because the cost isn't worth the benefit. We'd have to borrow the money and pay back the loan when it sells. What kind of experts do I get to come to the house and advise us? We need someone to say "this will cost around this, and the sell price will raise around this". Here are the major issues I know about:
1. Settling. Floor has cracked and heaved up in the basement like a corner of the house has settled. Cinder block basement wall has cracked. Stucco has cracked along side of chimney up outside of house. Chimney crack is wide enough to see light through up in attic. Attached garage is separating from house.
2. Roof is beyond life expectancy and has lost shingles.
We appreciate any advice you may have,
Mike


Follow-Up Postings:

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RE: Who to ask about repairing first or sell as is

Houses that need significant repair will be discounted in price by buyers based on the repairs required.

It can be a large hit if the repairs are viewed as expensive by the purchaser.

It will also reduce the number of potential buyers, sometimes significantly.

I have purchased many 'old lady' houses over the years.
Sometimes from the owner, many times from the estate or the heirs.

The risk can be significant if you do not know what to look for, and many buyers will walk away rather than even consider a house needing significant repairs.

I have not been caught short in a long time due to experience.

Buyers will likely demand an inspection and then negotiate a price concession based on the estimated cost of repairs, if they do not walk first.

It WILL slow down the sale and drag things out.

You need to decide how much money you are willing to put into the place based on carrying costs.
You MAY recover some of the money in a faster sale and reduced carrying costs.


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RE: Who to ask about repairing first or sell as is

Is it on a good lot in a nice location? Are builders still doing tear downs in her neighborhood?

(Tear downs have slowed here, but still happening.) Around here, someone with a house like your mom's usually calls a few builders first, to see if they are interested in the lot. They buy as is, often without even going inside, because they just want the land.

Yes, I KNOW that this crummy market has slowed all this down, but it's still happening here so maybe there too? So if she's in a desirable neighborhood (nice streets, good schools, etc.) contacting local builders may be the best first step. Then you don't have to make any improvements. But everyone, builder or no, expects a bargain these days.


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RE: Who to ask about repairing first or sell as is

You need to call a couple of local realtors and have them do a fair market value on the house as it exists, and a guess as to what it might bring when repaired. If the location is a good one, it might make more sense to market it as a teardown rather than as a residence. If the home is in poor repair in a low dollar area, then you're really not going to recuperate much in the way of repair expenses, and need to do the absolute minimal required to maintain a certificate of occupancy. That may mean that you "give" the home away at a very low price to account for it's defects. If the home is in a higher priced market and is considered an interesting style with many original features, then it may appeal to the old home lovers crowd, and you may be able to get by with just fixing the foundation and doing the roof because the new owners would want to do much of the work themselves. There are a lot of variables here, so you need the blunt opinion of several realtors as to whether or not it's worth putting any money into.

After you get the realtors opinions, call several home improvement contractors. Ask them what the home needs besides the obvious defects you've mentioned. (Is the electric panel too small, what about rusted out galvanized plumbing, termite infestations, etc.) There are some structural things that will need to be done in order to even put a home on the market, vs making it "remodeled" with cosmetic changes like painting the whole place. Get ready for sticker shock.

After you have both sides of the coin on the repairs vs current market value, then you can decide which route you want to take. If you have family here in this country that can help to deal with your mother on the downsizing/sentimental clutter issue that would be extremely helpful. If she's lived there a long time, she's apt to resist any changes to the home, and it might be more helpful if you were to relocate her to the end residence before you began any of the projects at the house.


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PS - Have someone local help her

After posting I thought some more about this. First, a Google search will lead you to some local builders who buy land. (like this one: http://www.tollbrothers.com has a link at the top that says "We Buy Land")

But I also thought about you being out of the country and your mom being on her own. Please don't give out her address without at least an initial conversation. See if there is a trusted friend who can be with her when someone comes to look at the house. Someone from the local office on aging may be able to help or provide some advice. I just don't want to see your mom taken advantage of.


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RE: Who to ask about repairing first or sell as is

First step is to hire a professional home inspector to perform a pre-sale inspection on the home as you are far more likely to get an accurate assessment than from a contractor who may be looking to up the cost. Minnesota does not license the profession, and be that as it may, you might be tempted to believe that a membership in ASHI, NACHI, NAHI etc is meaning..it is not. It is an honor system, and they verify nothing in terms of the HI's actual practice. IN addition, the never kick people out...
Best bet is to contact a local RE attorney and get a referral.

Make certain the the HI is licensed and/or trained (depending on state regulations) to perform wood destroying insect inspections and radon testing as these are all things that a buyer's HI will do.

Also, if the house has an underground oil tank, you will have to consider if you want to test for leaks or not. If you do, and it is leaking, clean up can be astronomical in cost. If its not leaking, best to remove it now before a buyer comes along and tests, and finds is leaking at that point.

Also, if it is not on public sewer and water, septic and well testing will be another issue. And, if on public sewer, many people now are having the sewer pipes to the street main scoped to see if they are intact...as that too is a hefty cost to replace.

After you find out the above info, you will be far better positioned to decide what you do and don't want to repair..if any.

You can then call the appropriate contractors to obtain specific estimates..and go from there.

Last but not least, as you are out of the country, you really need to hire a RE attorney to look after your mom's interests in this transaction.

Best wishes.


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RE: Who to ask about repairing first or sell as is

I'm like Brickeyee--I like the old lady houses and have bought a few. If there are original features in this house that would attract people like me, such as the original woodwork, fireplaces, sinks, tile--anything older than 1950 I like--I would leave the whole thing and price it to reflect that. Even the junk. One of the best houses I bought was an estate sale and they left me everything. In exchange for cleaning out the junk, I got some good antiques and cool old things. I loved that. Actually, I prefer that they don't try to fix things and mess up something I might like. Not much scares me to repair when it's an old house other than a leaking underground oil tank. It sounds like you have structural damage. It may be fixable or it may be too far gone. I'd get that checked and it if was fixable, assuming you have some original features, I'd price the house accordingly and then market it to the people who love the old lady houses. Hopefully you have someone who can help you with this. I haven't looked in a long time but there used to be a pretty good website for old houses that you could put it on. I'll post the address below.

Here is a link that might be useful: Historic Properties


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RE: Who to ask about repairing first or sell as is

You got a real problem on your hands. You have to disclose everything that is wrong and it is best to not try and hide anything. A pre-sale inspection is a great idea to give you a complete list of problems. Get 3 estimates from General Contractors with a complete list of repairs required and cost estimate. Also, I would guess some things might have to be brought up to code. Bounce the cost of repair vs any potential gain. You might end up fixing it up and being stuck with it. I would take the estimated repair list, subtract that cost from the comp. price and sell it as is. If you walk away with some money good for you. If not, that is life, move on.


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RE: Who to ask about repairing first or sell as is

"Also, I would guess some things might have to be brought up to code. "

Rarely.

Existing houses are grandfathered for just about every major code change.

If they co,plied with the code in efffect whan they were built, they comply now.

There have been a few exceptions.

Many localities have required all kitchen counter receptacles to be GFCI protected, but this is actually just a matter of swapping in a GFCI receptacle. No rewiring is required.

Even knob & tune (K&T) wiring remains code compliant if it has not been modified or messed around with (thoughy some insurance companies have refused to insure houses with K&T).

A lot of purchasers seem to be under the impression that they are purchasing a 'new' house and that everything must be updated to the latest revision of all the codes.
If you want a new house, buy a new house.
You can discover all the builder's defects for yourself.

Existing houses are not new.


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RE: Who to ask about repairing first or sell as is

Seems like the work you are outlining is a fairly significant problem and will be costly to remedy. My advice would be to contact at least 3 real estate agents to take a tour and get their opinion on selling price. I think they will recommend selling as is.

Here is a link that might be useful: North Andover Homes


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