, Buyer/Seller Articles »

I wrote this article in 2006 and send it out to my newsletter list. You’d be surprised at how many “tirekickers” I caught in the act! I thought it was worth dusting it off now that so many buyers are out looking, but many of you are doing some serious procrastinating and tirekicking yourselves.

Everyone’s got an opinion when they go house hunting. The style, furniture, colors, amount of
clutter are all instant ammunition for criticism. What’s wrong with a little nitpicking?

You, as a buyer, are not buying those things. You are buying location, floorplan, and the
physical condition of the building. Finishes do make a difference, but if you’re paying too
much attention to things that can be changed easily and not enough attention to the
important features of a home, you may be paying too much for a house that won’t suit your
lifestyle, or passing on a home that may be perfect for you with a little updating and creative
vision.

Here are some things to keep in mind when house hunting:
1. Location. This is the one thing about your new home you absolutely cannot change.
No matter if the house would be perfect if it were a few blocks away, it’s not. And it
never will be. Likewise, if you find a house in your ideal neighborhood that seems
wrong for you, give it a chance. Your home is about your day-to-day experience as
much as the actual rooms you occupy.

2. Floorplan. This is the second most important factor and one of the most costly to
change, if change is physically and legally an option. Moving or knocking down walls
is expensive and may require lengthy construction times and costly permits. Changes
you wish to make may not be legally allowed. If you fall in love with a house but want
to reconfigure it, consult with your architect, contractor and city hall. It takes much
more than a sledgehammer and a few sheets of drywall to rearrange the rooms in
your house!

3. General overall style of the interior decor. No matter how much you hate wallpaper
borders, pink carpet, dusty knickknacks, gaudy gold drawer pulls or the simmering
potpourri in the bathroom, don’t let them turn you away from a great house. Many
buyers fail to imagine their own style of decor in an otherwise good home, and these
are the houses that sit on the market. A mediocre house that has been on the market
for several weeks is your best opportunity for a bargain these days. Watch for price
reductions–this can be the time to pounce.

4. Charm is Cheap. Smart Realtors will advise their clients to put on a fresh coat of paint,
update light fixtures and load the bedrooms and baths with new linens and fresh
flowers. Don’t fall in love with just the pretty facade; make sure you’re also paying
attention to the big picture. Likewise, don’t walk out because you don’t like the
decorator’s choices. See the list of prices at the end of the article for quick fixes
versus major items of concern. Pretty soon that sturdy but slightly homely looks a lot
better. I can’t tell you how many times I’ve seen a buyer walk into the house and say,
Nice ceiling fan! Don’t let a new $150 fixture distract you from more critical details
that can cost your thousands later.

5. Read the disclosures. This is where the rubber hits the road. The disclosure packet will
tell you about special property tax assessments, recommended and critical termite
repairs, contractor’s inspection findings, neighborhood nuisances, planned
developments, environmental dangers, and other critical information that can cost you
or save you thousands of dollars down the line. This unassuming little stack of paper
is your best decisionmaking tool. A good Realtor will obtain disclosures for houses
you are considering making offers on, read them, and discuss them with you so you
can decide whether to offer, and how much is appropriate based on that information.

6. Be Willing to See Your Own Reluctance. If you are finding fault with every house you
see, you may not have done the soul-searching necessary to be ready to take the leap
into home ownership, or may not really want to make a change. Buying is a big
decision, potentially stressful and disruptive. Once you have made up your mind to
buy, you should find at least one very suitable home within the first 10 listings you
see. If this isn’t the case, you either need to refine your wish list or revisit it with your
Realtor.

7. Be Realistic about Current Home Values. If everything seems overpriced, you may
have unrealistic expectations about what you are really able to afford. Ask to see
recent sales to understand current market values per square foot. If someone else
paid $600 a square foot for a house just last month, you probably won’t find a similar
one listed for much less. Beware of “too good to be true” pricing, many times this
selling strategy ignites such a frenzy of overbidding that houses actually sell for far
more than they should.

8. Don’t Fall Victim to “Analysis Paralysis”. While you’re busy reading about Real Estate’s
inevitable decline, or the burst of the bubble, prices continue to climb, or good inventory can slip away from you. You may be missing a valuable opportunity to get into the market by procrastinating. An
environment tempered by a healthy dose of caution has curbed overbidding and noncontingent
offers, but historically, interest rates are still low. Don’t be so afraid to make the wrong decision that you make no decision at all.

9. The Offer is Where the Real Tire Kicking Should Start. Most offers contain both
financing and inspection clauses that were designed to encourage intense scrutiny of
the property, with no risk to the buyer. Made certain that any offer you make contains
these clauses to allow you adequate opportunity to inspect the property. The
appraiser, the contractor, the pest inspector, your friends, and your lender will all want
to have a chance to look carefully at your prospective purchase. If the property does
not appraise, or if inspections reveal information that you cannot swallow, or if you
change your mind within the condition periods specified in your offer, you may back
out. Period. But if you don’t make the offer, you may lose these opportunities to take a
closer look. Don’t be afraid to make a mistake with your offer–the independent
professionals standing behind you are there to make sure your decision is a sound
one.

10. Don’t forget Why You’re Kicking Tires in the First Place. Despite your hesitations,
criticisms, fears, and overall shock at the state of the market, there’s a part of you that
wants to purchase. Maybe you’re not ready now but want to prepare for a future
purchase. Maybe you are just tired of paying so much in taxes when you could be
building equity. No matter what your thought process may be, remember to make
every effort to make the big decisions in your life based on what you desire, not what
you fear. Whether buying your first home, buying investment property, or moving up
into a nicer place is something you aspire to, there’s a way to make it happen.

Fix It costs (assumes replacing existing fixtures without repiping or rewiring):
Item, Cost, Effect
Brighter or full spectrum lightbulbs $1-10 each.  Brighter, more cheerful rooms
Decluttering. Time only. Rooms appear larger. Calm feeling.
Junk removal. Potential tax benefit. Donated items can help others to start furnishing their homes.

New faucet set. $40-$150. Changes decor, makes bathroom feel new.
Refinish bathtub. $500-1200. New, clean feeling. Can last for years.
Professional house cleaning. $75-300. Can brighten house and eliminate pet, cooking, cigarette odors.
Fresh coat of paint (per room). $20-40/gallon. House feels cleaner. House feels newer. Color can change mood dramatically.
Decorator. $85-$150/hour to consult. Can save thousands on remodeling, and potentially help you use existing furniture more efficiently in your space.
Light fixtures or ceiling fan. $100-500. Dramatic mood change. Fans can create better air circulation in small spaces.
Professional carpet cleaning. $250-500. Brighten, restore, freshen.
New stove. $325-$2000. New appliances can make entire kitchen feel new.
Fridge. $500-$2500.
Dishwasher. $300-1200.
Washer/Dryer. $700-1500. Updated, more energy efficient.
Refinish existing wood floors. $2-4/square foot. Huge difference in feeling of home’s size and condition.

BIG CHANGES
Demolish and redo bathroom. $7,000-40,000. Can improve home’s value. Can take 2-12 weeks.
Demolish and redo kitchen. $15,000-$100,000. Many buyers’ #1 priority. Can be easy to overdo and is subject to taste. Can take 8-16 weeks or more.
Add garage (if possible). $100,000-$250,000. Usually a good investment if work produces multiple parking spaces.
Legalize in-law or “bonus room”. Subject to city approval, may not be possible.
Condo conversion (city + legal fees). $19,000-24,000 + physical improvement costs. Could increase value of units up to 20% and/or dramatically improve ability to finance and sell units.
Condo conversion (physical improvements) $$$$ Subject to city inspectors’ findings.