How much do you think was put into this recent remodel?

[catccc]

There is a house I'm interested in buying.  It was sold 5 months ago for 125K, and it's been remodeled and relisted at $225K.  I think this is exceedingly high for our area and the size of the place.  I'm curious what you think the flippers put into it.  I think that info would help me determine a fair offer.

Before:
http://www.estately.com/listings/info/306-center-street--2

After:
http://www.zillow.com/homedetails/306-Center-St-Kennett-Square-PA-19348/9136775_zpid/

[Felicity]

That's a really interesting case. I have no flipping or renovations experience, but I'd be interested in knowing what others think as well.

In terms of what a fair offer is - a fair office is what the market determines it is. ;) If other recent sales are much lower for the same quality house, then the property is overpriced. Don't get caught up too much in trying to determine how much they put into the house to make sure you're getting a good deal. Just make sure what your offer is reasonable for market and in line with your goals.

You might want to look at other houses for sale that are missing something, say an updated kitchen, and see what it would cost to remodel (or DIY) to make it the way you want. Which - you might start to learn based on other responses here. :)

[nereo]

Interesting

Obviously they put in new floors throughout  and put in a lot of trim (e.g. around the entrance to the kitchen, in place of the floorboard heaters.
The hanging ceiling is gone and they added some recessed lighting.

The "before" picture just shows a glimps of the kitchen, btu they clearly did a lot of work in there.  Changed the window to allow for a larger countertop, new cabinets, lighting and fixtures.

The upstairs bathroom also looks like they did a lot of work.  New windows and trim - toilet has been rotated... can't quite figure it out from the photos but it looks like they moved some of the walls around to make room for that vanity and space for a W&D combo.  It's too bad they didn't replace the tub with something nicer.

[catccc]

So, this may be a worthless discussion, as DH thinks this place is too small for our family. 

Still, it's a curious case.  There is a house across the street that is 50% more sqft, lot is 2x the size, interior is updated beautifully, exterior is amazingly landscaped, and it sold last fall (FSBO) for $225K.  There is just no way this place can go for $225K.

[ShoulderThingThatGoesUp]

Maybe $50,000? It is really hard to tell what they did in the upstairs bathroom, and why the upstairs bathroom has laundry hookups in it (why would you want this?). They didn't add forced air heat or anything like that, which makes me wonder how the bathroom is heated since it looks like they took out the covered radiator there.

[Megma]

I don't think it looks like 100k, I mean they want to make a profit too and you have to consider they're paying realtor fees on the sale possibly too.

To me, it looks unrealistic that they will sell for 225k. Looking at the similair listings Zillow gives, I would pay that much (they were all bigger, had more than one bath and listed for less).

[catccc]

Saw the place, there was an open house on Sunday.  The guy that flipped it was a guy that lives down the street.  This makes me think that he is an inexperienced flipper.  I think he overpaid for it?  Although who knows what allowances/rebates the seller made?  Isn't that a thing?

Everyone thinks he is asking way too much for it.

New windows throughout, carpet ripped up on 1st floor to expose hw flooring, which was refinished.  I think the bathroom was somehow expanded- the washer/dryer hookups were maybe in a closet before, and the closet space was converted to bathroom space? 

It all looks nice.

One of the bedrooms is so tiny, DH could stand in the middle and touch both walls.  You could fit a twin size bed in there, but not much else...

There's no way it is going to go for $225K.  It may go for $175.  If it goes for $150, I'll say to myself "$150?!  I would have bought it for that!"

[nereo]

Saw the place, there was an open house on Sunday.  The guy that flipped it was a guy that lives down the street.  This makes me think that he is an inexperienced flipper.  I think he overpaid for it?  Although who knows what allowances/rebates the seller made?  Isn't that a thing?

Everyone thinks he is asking way too much for it.

...
There's no way it is going to go for $225K.  It may go for $175.  If it goes for $150, I'll say to myself "$150?!  I would have bought it for that!"

Markets are hyper-local, so pricing is all about what other similar units have and are selling for now.
I lived in a market in California where we looked at a 750 sqft, single story 1br/1ba that was listed at $630k.  I also lived in rural New England where my co-worker bought a 3bd/3ba, 2000sqft two story home on 3 acres for $165k. YMMV.

[index]

That kitchen was done pretty cheaply. Beadboard backsplash, $350 whirlpool dishwasher, $650 range; cabinets were about 8k with installation... I'd figure about 12k in the kitchen. Carpet is about $4/sf installed, refinishing the hardwood is about $2 so 6k total. The bathroom has a nice vanity about $600. The rest are cheap materials, probably 4k in the bathroom. Refinishing the ceiling was around 3-4k. So that added up is 26 k. Add another 10 for contingency and I'd say about 35k.

The expensive items would have been - adding a half bath, central air (still has the base board heating).

If i was doing the flip, I'd be happy with doubling my out of pocket reno budget- 70k more than his purchase price or 195k.

[catccc]

Saw the place, there was an open house on Sunday.  The guy that flipped it was a guy that lives down the street.  This makes me think that he is an inexperienced flipper.  I think he overpaid for it?  Although who knows what allowances/rebates the seller made?  Isn't that a thing?

Everyone thinks he is asking way too much for it.

...
There's no way it is going to go for $225K.  It may go for $175.  If it goes for $150, I'll say to myself "$150?!  I would have bought it for that!"

Markets are hyper-local, so pricing is all about what other similar units have and are selling for now.
I lived in a market in California where we looked at a 750 sqft, single story 1br/1ba that was listed at $630k.  I also lived in rural New England where my co-worker bought a 3bd/3ba, 2000sqft two story home on 3 acres for $165k. YMMV.

For sure.  My sister lives in the Bay Area, where her friend recently bought a house- for $250K over asking.  Nuts.  This little town in PA is nothing like that.  Still, comps don't support anywhere near the list price.  I really think the flipper just overpaid.  There's another house a couple streets over that was in need of renovations.  It was twice as big, though, and sold for less than $90K.

[Dicey]

The "After" link is not working. Did it sell?

[Frankies Girl]

The "After" link is not working. Did it sell?

http://www.estately.com/listings/info/306-center-street--3

Says it is pending.... holy shit, that is crazy.

[Dicey]

The "After" link is not working. Did it sell?

http://www.estately.com/listings/info/306-center-street--3

Says it is pending.... holy shit, that is crazy.

Based on the "After" pictures, (Thanks, FG) I can see why. People don't want to do the work. Now, if I was working full time and had a couple of little kids, I wouldn't either. DIY isn't for everyone, nor should it be. The problem will be if the appraisal comes in low and the buyers don't have enough cash to close the gap.

- Whoever mentioned paint previously was spot on. We are shopping for our next rental property in a very targeted area. We are waiting for the price to come down on two properties. We know it will, because they are painted shocking PINK inside. Nobody wants them as-is, but DH is a painting contractor by trade. Piece of cake for us. All we have to do is be patient while the market passes them by. We're in escrow on one now that had the same "problem". Very taste-specific colors. It was on the market for over a year and we paid $100k less than the original asking price. It will cost us a couple of thousand to do all the work, but hey, we're willing to and the target buyer in the area isn't. We're not going to flip them, but their increased attractiveness when we're done gets us above-market rents.

- If you're looking at those "After" pictures, notice the hinges in the kitchen. Changing to hidden hinges is a low cost switch that makes a world of difference. The seller missed an easy upgrade there. And people go nuts for self-closing doors and drawers, which are also available relatively cheaply, especially on line.

- Last words: 99Centknobs.com. Really. Got the knobs for the last two houses there.

[catccc]

Yes, it is pending!  I am astonished it was snatched up so quickly, and I'm really curious what the sales price was.  It can't have been $225K.

Did I mention how small one of the bedrooms was?!  DH (who is maybe 5'11") could easily touch opposite walls standing in the middle of the room.

meanwhile, I'm feeling nervous about the local market, low inventory, and rising prices.  Someone tell me again how renting can be so much better than buying, please?!

[Cassie]

If it does not appraise for the price that is offered the buyers can ask the sellers to come down to the appraisal price or they can walk away. Even if the buyers have the $ why would they pay more then what the house appraises at?

[catccc]

If it does not appraise for the price that is offered the buyers can ask the sellers to come down to the appraisal price or they can walk away. Even if the buyers have the $ why would they pay more then what the house appraises at?

From what I've heard, appraisers seem like a scam- they know the purchase price, and unless it is way off, will appraise the property at what the market value is- aka what someone is willing to pay for it, aka, the buyer's purchase price.  I was stunned when I learned this.  I know they have a code of ethics and are supposed to do other work to arrive at an appraisal, but it doesn't sound like it's a process that is independent of the contract/agreement of sale.

[Frankies Girl]

Yes, it is pending!  I am astonished it was snatched up so quickly, and I'm really curious what the sales price was.  It can't have been $225K.

Did I mention how small one of the bedrooms was?!  DH (who is maybe 5'11") could easily touch opposite walls standing in the middle of the room.

meanwhile, I'm feeling nervous about the local market, low inventory, and rising prices.  Someone tell me again how renting can be so much better than buying, please?!

How renting can be better than buying? How about the fact that I just spent about 10K on replacing a leaky roof and fixing the rotted wood, and discovered termites in a porch structure (thank dog not in the actual house) and have to have the house treated to prevent the house from getting destroyed. And there's more fun to come... back porch deck needs cleaning and resealing, chimney cap needs replacing, and I have to prime and paint a room's walls and ceiling due to staining. Oh! And they're raising my property taxes again, so I'll be spending a morning begging them to not do that sometime in the near future. :(

Houses are giant money pits that are in a constant state of decay and I loathe having to track down and vet repair people... I really miss the days of just being able to call the landlord and have someone else deal with the whole mess; they just showed up and the whatever was fixed. Sigh.

But if you're still wanting to buy a house, the pickings might be getting better come summer since that's usually when folks put their house on the market... so you might have better inventory in the next month or so. ;)

[Cassie]

WE have bought and sold many homes and the appraisals have been very independent of the asking price. One time we had to lower the price the buyer agreed to pay because it did not appraise for that amount.  The buyer was going to rightfully walk if we did not lower the price.  One time we put an offer in on a house and it appraised for 30K less. The seller would not lower the price so we walked.

[Dicey]

If it does not appraise for the price that is offered the buyers can ask the sellers to come down to the appraisal price or they can walk away. Even if the buyers have the $ why would they pay more then what the house appraises at?

In a hot market with low inventory and rapidly rising prices such as the Bay Area, it happens All. The. Time. People even write it into their offers. Believe me, when you finally find something that works for you, it's easier to find a  little (or a lot) more money than to find another suitable house. Bat-shit crazy, but an everyday reality here.

On a related note: I just did a refi on a rental in a resort area (outside the Bay Area). I was worried that it was going to be tight, so when I spoke to the appraiser to set the appointment, I told her about some of the upgrades, explained how to tell various levels of upgrades and add-ons throughout the community and what those upgrades had cost when the homes were built. I'm an original owner, so I knew this stuff off the top of my head. She was very appreciative. As a result, it appears she chose the comps very strategically. Every house she used was in pristine shape. No foreclosures, short sales or distressed properties were on her list. So, she stuck exactly to the rules, and gave me a number that could have been much lower had she selected different comps. If I actually wished to sell this property, my asking price would have to be much lower than the amount it just appraised for. Tl;dr - Strategic selection of comps makes a world of difference.

[Cassie]

Actually both situations I mentioned happened when our market was very hot. That is why the seller would not drop 30k for the appraisal price but in the end she did not get more $ then the property was worth. WE dropped our price during a hot market when things were selling in days because we were 5k over the appraisal.

[catccc]

Yes, it is pending!  I am astonished it was snatched up so quickly, and I'm really curious what the sales price was.  It can't have been $225K.

Did I mention how small one of the bedrooms was?!  DH (who is maybe 5'11") could easily touch opposite walls standing in the middle of the room.

meanwhile, I'm feeling nervous about the local market, low inventory, and rising prices.  Someone tell me again how renting can be so much better than buying, please?!

How renting can be better than buying? How about the fact that I just spent about 10K on replacing a leaky roof and fixing the rotted wood, and discovered termites in a porch structure (thank dog not in the actual house) and have to have the house treated to prevent the house from getting destroyed. And there's more fun to come... back porch deck needs cleaning and resealing, chimney cap needs replacing, and I have to prime and paint a room's walls and ceiling due to staining. Oh! And they're raising my property taxes again, so I'll be spending a morning begging them to not do that sometime in the near future. :(

Houses are giant money pits that are in a constant state of decay and I loathe having to track down and vet repair people... I really miss the days of just being able to call the landlord and have someone else deal with the whole mess; they just showed up and the whatever was fixed. Sigh.

But if you're still wanting to buy a house, the pickings might be getting better come summer since that's usually when folks put their house on the market... so you might have better inventory in the next month or so. ;)

Yes!  Thank you.  My landlord spent 10K on improving the heating system that has saved us several thousand $$ over the last 3 winters, plus we never run out of hot water because part of the heating install included a tankless water heater.  And then he still didn't raise my rent until year 6.  And the refrigerator broke and I didn't have to buy a new one.  And a kid across the street put a bb pellet through a sliding glass door and it didn't cost me a cent to fix.  Yes, renting is awesome, in some ways! 

The thinking that home ownership is smart and renting is not is so ubiquitous, all the owners want renters to buy.  And they are vocal about it.  Sometimes it makes me feel like not a "real" grown up because I rent. 

DH and I have decided to spruce up our home- we won't be spending much, if anything.  Mostly strategic moving of furniture and rethinking how we use the space.  Moving some kids stuff out of the living area, getting rid of stuff that doesn't make the place better.  It's a great location, the space is more than sufficient.  If we lived in it more purposefully, I think we would be happier there and I would worry a lot less about this home buying stuff.

[catccc]

Really surprised to see that it went for $215K.  I feel like that is way too much for this little town and that little place, but I guess the buyer's have spoken.  I also feel a lot of pressure to buy the next place that meets our needs (which may be one we see tonight...)  gah!