Dear Michael: We are looking to purchase a home that is listed at a very good price. The Realtor has listed it “as is” and has disclosed to us and on the MLS that the house needs a new roof. Does this mean that we cannot request the seller to credit us or replace the roof?
Answer: You can always ask but don’t expect it. The price of a new roof has been factored in the list price and in retrospect, the seller has listed his/her home at that price taking into consideration the condition of the roof. Besides, this home being listed at an already low price will allow you to get a new roof that should last you approximately 30 years compared to the many homes that may only have a few years of roof left.
If the property is listed at a very low price and you are getting a bargain, when or if your offer is accepted, take the home as it is disclosed to you “as is.” At that price, the seller may very well have back-up offers on the table and therefore, will and can use them as leverage.
Dear Michael: I own a house that is in desperate need of repair. We need to fix up the entire house. Would we be better off remodeling it? It could take up to six months and much of our savings. Or should we list the house as a fixer-upper and hope someone wants to buy it?
Answer: When selling a home as a fixer-upper, you are possibly leaving cash on the table. But, on the other hand, if you don’t have the time, patience, interest or money to fix up your home, taking whatever cash you can get may be the better alternative.
The most effective way to make a decision is to ask a real estate agent to view your home. Ask how much he/she thinks you could get for your property “as is.” Then, compare how much you could get if you fixed everything up. If the equation makes sense and you are mentally ready to take on the remodeling challenge, consider completing the project. If the profit is minimal and your time is valuable, selling it as fixer-upper may be the better way to go.
Dear Michael: I want to buy a house with a good resale value. How do I determine if my house will increase in value within the next five years so that we can upgrade to a bigger home?
Answer: Buying a home is very much like buying a stock. How do you really know which stock will increase most in value over the years? As with any investment, there is always risk involved.
Location is the most important factor when purchasing a home. Think resale when choosing your location. Every so often, it is just timing that works out best for you. For example, if you buy a home before a major surge in local prices or a new business is settling in the area, chances are your property will appreciate in value over time. Before you can actually pick out a house, you should to choose what cities or communities you would like to live in. There are many factors that you should pay attention to, not only for your needs, but also because you intend to eventually sell the home to someone else. Carefully choosing your area is the first step and “location, location, location” will help maximize your future potential resale value.
There are no guaranties in real estate, but if you look at the long-term chart for the past 30 years, you’ll see the investment return being well worth it, especially when you buy at the low end of market price.
Michael Kayem is a Realtor with Re/max/Execs, serving Culver City and the Westside since 2001. Contact him at (310) 390-3337 or homes@agentmichael.com.