Wednesday, December 10, 2014

Q: We’re excited about buying a place on Vashon.

My husband and I are very handy so a fixer is fine. We know we’re in a low price range but we can do a lot of the work ourselves.
A: I appreciate your enthusiasm but I want to be sure you understand what "fixer" really means. Many homes, even in the highest price ranges, may be outdated and need some cosmetic changes. Often buyers what to get rid of carpeting and install wood floors, redo the kitchen and bathrooms, maybe upgrade the heating systems, plus painting inside and out. That doesn’t make it a fixer.
A real fixer, particularly in the lowest price ranges, may require a new roof, drainage to fix a wet basement, replacement of non functioning appliances, pest damage repair, mold removal or even major structural work. That’s usually beyond the ability of most buyers, no matter how handy. It’s important that you know that banks and mortgage lenders generally won’t loan on a real fixer. However, there are excellent rehab loans available. FHA has a good program that can take care of most major issues. But they will determine what needs to be done, and often, who will do it. They allow for some things to be done by the owners, but within a very limited scope. They will rely on the appraiser to list the deficiencies that have to be corrected and use licensed contractors to do the work. To get one of these rehab loans you must qualify for the full package. That means you have to qualify for the purchase price plus the cost of the rehabilitation work. That often pushes lower income buyers out of the market. That’s one reason why many of our foreclosures, short sales and fixers go to cash buyers who will fix them up to resell or rent. That puts young buyers, downsizing seniors and first time buyers at a disadvantage. But there is good news! Over the last year there have been several homes in good condition that have sold for under $250,000. So there is hope!

Wednesday, December 03, 2014

Q: We were really disappointed that you didn’t call our attention to that new north end listing.

It looks like it would have been perfect for us. I see that it’s now pending so there’s no chance for us to see it. We expected that you would be keeping us informed about new listings.

A: I do keep clients informed of new listings that I think might fit their needs. However, this house was priced well over the maximum that you told me you wanted to spend. I’m sorry if it would have been a possibility for you, but you should have made it clear that you were willing and able to spend more. This is an issue that comes up sometimes. Buyers, not trusting the motivation of their Realtor, tell them a lower number than they are really able to spend. They fear being pushed into spending too much. There are, I’m sad to say, still a few brokers out there that try to push buyers to the top of their price range, but I’m not one of them. If anything, I tend to be very conservative with my client’s money. You were clear that you didn’t want to spend any more than $400,000 on a new home no matter what. So, sadly, when a house that otherwise fit your requirements came on the market priced a great deal higher, I didn’t even think to call or email you. I always like to know two figures from my clients. The first thing I want to know is the most you are willing to spend. The second and even more important figure is what you would really prefer to pay. So if a house came on the market for $420,000, I would know that if it was the right home for you, that extra $20,000 on the price would be possible for you. It would also mean I might be able to negotiate that price down a bit, which would be even better. But when you drew a bright line at $400,000 I had to believe that you meant it.