Buyers can't have it both ways

[Anonymous]

Houses in our area are selling like hotcakes. These are 1980-2000 built homes, most have been updated or at least cleaned up/staged to look as neutral as possible, and going off the market immediately since the spring. Our offer was super competitive (e.g. no contingencies offered with 12 hr deadline before open house) and accepted. The last house that sold was under similar circumstances (they haven't closed yet but our neighbors are friend with the sellers and loooove to talk). HOWEVER there is a house that has been on the market for four weeks, has had one price drop, and no one has bit. Why? Because the owners have done nothing to update it/make it appealing to millennials - it has granny furniture, granny colors (dark red accent wall, hunter green dining room, anyone?), brass fixtures, old carpet, you name it (the kitchen is actually pretty nice - white cabs, gray counters, stainless appliances). It's at a great price now, but no one wants to touch it because it would require maybe $25,000 worth of work to get up to date (really just paint and replace carpets and fixtures). I just don't get it - you can't have it both ways, folks? Can't complain there are no houses on the market, but then not buy a house that's a great deal!

[Anonymous]

i agree. i am stunned by how many people get turned off by an unstaged home with basic cosmetic issues (but the same people would claim as sellers that staging is worthless)

[Anonymous]

I think there are people for whom the idea of painting by themselves or waiting 4-6 weeks to get carpet installers or plumbers in is just impossibly daunting.

A lot of us who grew up in the 70s and 80s were used to living in houses that still looked like 60s and 70s time capsules, so it’s normal for a house not to be perfectly updated at all times. I heard a thing yesterday on NPR about how younger buyers want turnkey. If you’re working all the time or have only seen Instagram houses, I can see how some brass and a red wall would be a lot.

[Anonymous]

That's one reason we got such a great deal on our house, which is in a very competitive neighborhood/area. First they were divorcing, but also the home had dark floors, old furniture that was oddly placed and off-scale for the rooms, one room was staged in such a way that even though it was a bedroom it didn't look like a bedroom - so it sat and sat even with two price drops. We made a below list offer, they negotiated up a bit - we accepted. We landed at $180K below their original ask. We painted, changed all the floors, repainted the kitchen cabinets, ripped out the 90's travertine in the bathrooms.

[Anonymous]

Anonymous wrote:That's one reason we got such a great deal on our house, which is in a very competitive neighborhood/area. First they were divorcing, but also the home had dark floors, old furniture that was oddly placed and off-scale for the rooms, one room was staged in such a way that even though it was a bedroom it didn't look like a bedroom - so it sat and sat even with two price drops. We made a below list offer, they negotiated up a bit - we accepted. We landed at $180K below their original ask. We painted, changed all the floors, repainted the kitchen cabinets, ripped out the 90's travertine in the bathrooms.

It's ruthless to take advantage of people in one of the most stressful times of their lives, but this is how you get a deal.

[Anonymous]

Anonymous wrote:Houses in our area are selling like hotcakes. These are 1980-2000 built homes, most have been updated or at least cleaned up/staged to look as neutral as possible, and going off the market immediately since the spring. Our offer was super competitive (e.g. no contingencies offered with 12 hr deadline before open house) and accepted. The last house that sold was under similar circumstances (they haven't closed yet but our neighbors are friend with the sellers and loooove to talk). HOWEVER there is a house that has been on the market for four weeks, has had one price drop, and no one has bit. Why? Because the owners have done nothing to update it/make it appealing to millennials - it has granny furniture, granny colors (dark red accent wall, hunter green dining room, anyone?), brass fixtures, old carpet, you name it (the kitchen is actually pretty nice - white cabs, gray counters, stainless appliances). It's at a great price now, but no one wants to touch it because it would require maybe $25,000 worth of work to get up to date (really just paint and replace carpets and fixtures). I just don't get it - you can't have it both ways, folks? Can't complain there are no houses on the market, but then not buy a house that's a great deal!

Deadlines on offers before open houses in hot markets are meaningless and stupid. Fire whatever agent suggested you do this.

[Anonymous]

Are you sure it’s just cosmetic upgrades that need to be done?

[Anonymous]

Anonymous wrote:Are you sure it’s just cosmetic upgrades that need to be done?

See that's the thing - when someone hasn't kept up a house - there are usually other issues. At least that's my experience in looking at homes that "need a little work".

[Anonymous]

Sorry, but I doubt any neighborhood in the DC area is "selling like hotcakes" in September 2023.

And if the market was truly as hot as you describe, then any house in any condition would sell, to developers, for instance, who will raze properties and build new.

So I don't dispute that un-renovated homes sell more slowly (DUH!), but I do dispute your description of your neighborhood.

[Anonymous]

I would rather have a house that hasn't been updated than badly done.

[Anonymous]

Anonymous wrote:Houses in our area are selling like hotcakes. These are 1980-2000 built homes, most have been updated or at least cleaned up/staged to look as neutral as possible, and going off the market immediately since the spring. Our offer was super competitive (e.g. no contingencies offered with 12 hr deadline before open house) and accepted. The last house that sold was under similar circumstances (they haven't closed yet but our neighbors are friend with the sellers and loooove to talk). HOWEVER there is a house that has been on the market for four weeks, has had one price drop, and no one has bit. Why? Because the owners have done nothing to update it/make it appealing to millennials - it has granny furniture, granny colors (dark red accent wall, hunter green dining room, anyone?), brass fixtures, old carpet, you name it (the kitchen is actually pretty nice - white cabs, gray counters, stainless appliances). It's at a great price now, but no one wants to touch it because it would require maybe $25,000 worth of work to get up to date (really just paint and replace carpets and fixtures). I just don't get it - you can't have it both ways, folks? Can't complain there are no houses on the market, but then not buy a house that's a great deal!

That's 25k in cash and most people are very cash poor immediately after a home purchase

[Anonymous]

Anonymous wrote:

Anonymous wrote:Houses in our area are selling like hotcakes. These are 1980-2000 built homes, most have been updated or at least cleaned up/staged to look as neutral as possible, and going off the market immediately since the spring. Our offer was super competitive (e.g. no contingencies offered with 12 hr deadline before open house) and accepted. The last house that sold was under similar circumstances (they haven't closed yet but our neighbors are friend with the sellers and loooove to talk). HOWEVER there is a house that has been on the market for four weeks, has had one price drop, and no one has bit. Why? Because the owners have done nothing to update it/make it appealing to millennials - it has granny furniture, granny colors (dark red accent wall, hunter green dining room, anyone?), brass fixtures, old carpet, you name it (the kitchen is actually pretty nice - white cabs, gray counters, stainless appliances). It's at a great price now, but no one wants to touch it because it would require maybe $25,000 worth of work to get up to date (really just paint and replace carpets and fixtures). I just don't get it - you can't have it both ways, folks? Can't complain there are no houses on the market, but then not buy a house that's a great deal!

That's 25k in cash and most people are very cash poor immediately after a home purchase

This. Most Millennials don't have another $50-100K in liquid cash to fund a mini-renovation after closing on their first house. Downpayment and closing costs basically wipe out their bank accounts and they need to rebuild their emergency fund.

This was certainly true for us in 2017 when we bought our current house. We said we would do a full gut renovation in 5 years. Well, it's six years later and we have a lot of cash saved up, but that full gut renovation costs 2x in 2023 compared to the cost in 2017. And now we have enough to fund a downpayment on an investment property, so we are just sitting tight right now.

So yeah, Millennials would like turn-key because they can "pay" for the cost of the renovation via their mortgage loan. The options are $100K in capital out-of-pocket to fund a renovation vs. $12K via 10% downpayment and add another $120K to the mortgage. In other words, they'd rather take a bigger mortgage to pay for it as they don't have the capital to fund it themselves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are you sure it’s just cosmetic upgrades that need to be done?

See that's the thing - when someone hasn't kept up a house - there are usually other issues. At least that's my experience in looking at homes that "need a little work".

Keeping up house maintenance is a different issue than house decor. My parents house was perfectly maintained -- and also had perfect 90s decor. They loved that look and never changed.

I think its easier to see imperfect maintenance when old decor remains, so I'd rather have that than something that obviously was repainted just to stage, because who knows what cracks/water leaks were just painted over?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses in our area are selling like hotcakes. These are 1980-2000 built homes, most have been updated or at least cleaned up/staged to look as neutral as possible, and going off the market immediately since the spring. Our offer was super competitive (e.g. no contingencies offered with 12 hr deadline before open house) and accepted. The last house that sold was under similar circumstances (they haven't closed yet but our neighbors are friend with the sellers and loooove to talk). HOWEVER there is a house that has been on the market for four weeks, has had one price drop, and no one has bit. Why? Because the owners have done nothing to update it/make it appealing to millennials - it has granny furniture, granny colors (dark red accent wall, hunter green dining room, anyone?), brass fixtures, old carpet, you name it (the kitchen is actually pretty nice - white cabs, gray counters, stainless appliances). It's at a great price now, but no one wants to touch it because it would require maybe $25,000 worth of work to get up to date (really just paint and replace carpets and fixtures). I just don't get it - you can't have it both ways, folks? Can't complain there are no houses on the market, but then not buy a house that's a great deal!

That's 25k in cash and most people are very cash poor immediately after a home purchase

This. Most Millennials don't have another $50-100K in liquid cash to fund a mini-renovation after closing on their first house. Downpayment and closing costs basically wipe out their bank accounts and they need to rebuild their emergency fund.

This was certainly true for us in 2017 when we bought our current house. We said we would do a full gut renovation in 5 years. Well, it's six years later and we have a lot of cash saved up, but that full gut renovation costs 2x in 2023 compared to the cost in 2017. And now we have enough to fund a downpayment on an investment property, so we are just sitting tight right now.

So yeah, Millennials would like turn-key because they can "pay" for the cost of the renovation via their mortgage loan. The options are $100K in capital out-of-pocket to fund a renovation vs. $12K via 10% downpayment and add another $120K to the mortgage. In other words, they'd rather take a bigger mortgage to pay for it as they don't have the capital to fund it themselves.

I get the impression that most people on DCUM have their parents helping them buy the home, so they aren't as cash poor as you'd think.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are you sure it’s just cosmetic upgrades that need to be done?

See that's the thing - when someone hasn't kept up a house - there are usually other issues. At least that's my experience in looking at homes that "need a little work".

Many flips are done cheaply and its all cosmetic upgrades and not the important things like plumbing, electrical.