Buyers can't have it both ways

[Anonymous]

That’s how my sister got an amazing house for probably $200K under: the owners loved wallpaper and burgandy wall paint, enameled chandeliers and heavy, elaborate drapes. Think French Country peak 1990’s. They’d spared no expense in decorating (luckily in upkeep too!) My sister sweetly accepted the extra rolls of wallpaper and then had all of it removed, took down most of drapes - at least layers of - and repainted. This is a sought after street in a close in neighborhoods - where smaller house, smaller yard next door had sold for 1.9m a month before. You’re not buying the decor !!

[Anonymous]

I am a millennial and can support the PP who stated that millennials need to buy turnkey. Frankly I would only ever buy a house that needed serious reno’s (the house OP describes sounds like it does) if the price was 200k under market. The reason being that at least 100-150k would be needed for the renovation and then I would want further significant compensation for the time, stress and effort needed to find and hire competent contractors etc, and make sure the job goes to inclusion.

There are always folks who don’t care for the condition they live in as long as they are buying into good school districts though, so if you have a good neighborhood I’m still surprised the house hasn’t been snapped up!

[Anonymous]

You sound like someone who hasn’t kept up with the inflation of the cost of updating. Labor, materials, appliances… everything is sky high.

[Anonymous]

Many of these posts are conflating updating/renovating with staging. These are two different things.

Yes, a house with a 1970s kitchen makes you wonder if the owners couldn’t afford to address issues that are actually serious, either. I do agree that millennials won’t be able to afford the renovation so they appreciate a new kitchen.

Painting falls somewhere in between renovation and staging, but it’s not “staging.” It’s calling a painter, and our parents did that decades ago.

Is anybody else sick of the staging boosters (agents and stagers?) trying to drum up business here? Sure, a small minority of people can’t see past the brown furniture and are helped by three beige chairs and some cheesy “artwork.” But the rest of us, not so much.

[Anonymous]

Anonymous wrote:

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.

Ruthless? How? We didn't base our offer on the fact that they were divorcing. We based it on the fact that the house was sitting for months with two price drops and no offers, and that the decor was outdated, dark, and ugly. Yes I'm sure they were eager to get out because of their divorce but that's on them, not us.

[Anonymous]

Just the perspective from the other side. I'm an older millennial who bought my first house a couple years ago, and just about all my friends have bought their first home in the last 8-10 years.

We put 17% down because we saved aggressively for years. It's the most any of my friends in the DC area have put down, by far. Most are putting down 3, 4, 5%. I have one friend who literally put a half a percent down. DC closing costs are high - just saving enough to cover that is a lot. (Only one of my friends had monetary help from family). We're saving everything we've got to get enough to cover closing costs and a bit of money down. Waiting and saving more doesn't make sense - homes get more expensive faster than you can save.

If you've struggled to put together $50k for closing costs and a small downpayment, plus you need to have savings in case you have a major repair needed in the first couple of years, you don't have $25k to fix up the house! You just don't.

Let's put real numbers on this - your budget is $600k. You can buy House A at the top of your budget that's turnkey, or you can buy House B for $550k that requires $25k of work. You've got a 5% downpayment ($30k) plus closing costs, and you've got a $30k emergency fund. Let's assume 7.5% interest rate.

If you buy House A, your monthly mortgage is $3,986. If you buy House B, your monthly mortgage payment is $3,636. Yeah, House B is going to save you $350 a month. And it's a better financial move in the long run. But if you go that way, you're going to nearly wipe out your emergency fund on house improvements day 1.

So yeah, if you can afford the extra $350 a month, you buy House A. It's a lot easier to come up with $350 a month than it is to come up with $25k, especially when you're still toward the beginning of your career.

[Anonymous]

Anonymous wrote:Just the perspective from the other side. I'm an older millennial who bought my first house a couple years ago, and just about all my friends have bought their first home in the last 8-10 years.

We put 17% down because we saved aggressively for years. It's the most any of my friends in the DC area have put down, by far. Most are putting down 3, 4, 5%. I have one friend who literally put a half a percent down. DC closing costs are high - just saving enough to cover that is a lot. (Only one of my friends had monetary help from family). We're saving everything we've got to get enough to cover closing costs and a bit of money down. Waiting and saving more doesn't make sense - homes get more expensive faster than you can save.

If you've struggled to put together $50k for closing costs and a small downpayment, plus you need to have savings in case you have a major repair needed in the first couple of years, you don't have $25k to fix up the house! You just don't.

Let's put real numbers on this - your budget is $600k. You can buy House A at the top of your budget that's turnkey, or you can buy House B for $550k that requires $25k of work. You've got a 5% downpayment ($30k) plus closing costs, and you've got a $30k emergency fund. Let's assume 7.5% interest rate.

If you buy House A, your monthly mortgage is $3,986. If you buy House B, your monthly mortgage payment is $3,636. Yeah, House B is going to save you $350 a month. And it's a better financial move in the long run. But if you go that way, you're going to nearly wipe out your emergency fund on house improvements day 1.

So yeah, if you can afford the extra $350 a month, you buy House A. It's a lot easier to come up with $350 a month than it is to come up with $25k, especially when you're still toward the beginning of your career.

This was our situation. We actually did buy a house with “cosmetic” fixes and like PPs have warned, the need for fixes was NOT skin deep.

In hindsight we should have used that free money of low interest rates to buy something that had already been fully updated instead of having to use our precious cashflow to pay for all this deferred maintenance.

[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!

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

Have been in the market this year? We lost out on four houses before this one and did what we had to do to get this one. We offered list price, waived contingencies (we did do a pre inspection), and were willing to do a 60 day close. This was pretty typical over the spring and summer.

[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".

OP here. We went to an open house and the house appears to be well maintained - the HVAC and water heater were less than 10 years old, kitchen appliances and cabinets, counters have clearly been upgraded.

Just because an older couple hasn’t updated their paint and furniture doesn’t mean they haven’t maintained the house!!

[Anonymous]

Anonymous wrote:

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.

Lololol sellers have been taking fulllll advantage of buyers regardless of circumstances for the past five years. “Oh you just had a baby and need extra space? Sorry, this New York investor offered a 14-day close!” The market is shifting and yes you can expect buyers to be ruthless.

[Anonymous]

Anonymous wrote:I am a millennial and can support the PP who stated that millennials need to buy turnkey. Frankly I would only ever buy a house that needed serious reno’s (the house OP describes sounds like it does) if the price was 200k under market. The reason being that at least 100-150k would be needed for the renovation and then I would want further significant compensation for the time, stress and effort needed to find and hire competent contractors etc, and make sure the job goes to inclusion.

There are always folks who don’t care for the condition they live in as long as they are buying into good school districts though, so if you have a good neighborhood I’m still surprised the house hasn’t been snapped up!

This is the problem - paint and fixtures do not mean “serious renos”.

You really can’t have it both ways “boomers won’t sell their houses. The ones that do haven’t made it perfectly suited to MY taste before they moved out”

[Anonymous]

Anonymous wrote:You sound like someone who hasn’t kept up with the inflation of the cost of updating. Labor, materials, appliances… everything is sky high.

Which is why the sellers didn’t do that shit for you.

[Anonymous]

Anonymous wrote:Just the perspective from the other side. I'm an older millennial who bought my first house a couple years ago, and just about all my friends have bought their first home in the last 8-10 years.

We put 17% down because we saved aggressively for years. It's the most any of my friends in the DC area have put down, by far. Most are putting down 3, 4, 5%. I have one friend who literally put a half a percent down. DC closing costs are high - just saving enough to cover that is a lot. (Only one of my friends had monetary help from family). We're saving everything we've got to get enough to cover closing costs and a bit of money down. Waiting and saving more doesn't make sense - homes get more expensive faster than you can save.

If you've struggled to put together $50k for closing costs and a small downpayment, plus you need to have savings in case you have a major repair needed in the first couple of years, you don't have $25k to fix up the house! You just don't.

Let's put real numbers on this - your budget is $600k. You can buy House A at the top of your budget that's turnkey, or you can buy House B for $550k that requires $25k of work. You've got a 5% downpayment ($30k) plus closing costs, and you've got a $30k emergency fund. Let's assume 7.5% interest rate.

If you buy House A, your monthly mortgage is $3,986. If you buy House B, your monthly mortgage payment is $3,636. Yeah, House B is going to save you $350 a month. And it's a better financial move in the long run. But if you go that way, you're going to nearly wipe out your emergency fund on house improvements day 1.

So yeah, if you can afford the extra $350 a month, you buy House A. It's a lot easier to come up with $350 a month than it is to come up with $25k, especially when you're still toward the beginning of your career.

But the issue is that there are very few House As on the market so House B is your only option and you won’t buy it because you’re scared of paint.

[Anonymous]

Anonymous wrote:Just the perspective from the other side. I'm an older millennial who bought my first house a couple years ago, and just about all my friends have bought their first home in the last 8-10 years.

We put 17% down because we saved aggressively for years. It's the most any of my friends in the DC area have put down, by far. Most are putting down 3, 4, 5%. I have one friend who literally put a half a percent down. DC closing costs are high - just saving enough to cover that is a lot. (Only one of my friends had monetary help from family). We're saving everything we've got to get enough to cover closing costs and a bit of money down. Waiting and saving more doesn't make sense - homes get more expensive faster than you can save.

If you've struggled to put together $50k for closing costs and a small downpayment, plus you need to have savings in case you have a major repair needed in the first couple of years, you don't have $25k to fix up the house! You just don't.

Let's put real numbers on this - your budget is $600k. You can buy House A at the top of your budget that's turnkey, or you can buy House B for $550k that requires $25k of work. You've got a 5% downpayment ($30k) plus closing costs, and you've got a $30k emergency fund. Let's assume 7.5% interest rate.

If you buy House A, your monthly mortgage is $3,986. If you buy House B, your monthly mortgage payment is $3,636. Yeah, House B is going to save you $350 a month. And it's a better financial move in the long run. But if you go that way, you're going to nearly wipe out your emergency fund on house improvements day 1.

So yeah, if you can afford the extra $350 a month, you buy House A. It's a lot easier to come up with $350 a month than it is to come up with $25k, especially when you're still toward the beginning of your career.

Thank you, for real. I was one of the PPs who just didn’t get it but this makes total sense to me. I’ve always been baffled by the younger 30-somethings in my neighborhood that buy the pricey updated house instead of the far less expensive not updated house. And then they don’t furnish the house while saying things in public about not having money. Not being sarcastic- it makes sense and you might as well finance as much as you can and as nice as you can if you’ll be there for a while. We didn’t do it like that and had to live with some major bleh for a long time and have been putting what might otherwise be bathroom and kitchen money into stuff like the roof and the deck.

[Anonymous]

Millennials here are proving my point, y’all are lazy!!