sell as-is vs renovate

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
I am not fully understanding what the exact issue is here. Are you saying that the house is no longer livable for you as is without renovation? Or is this more of a convenience, QOL issue? Or are you trying to prepare for the situation where you no longer can climb stairs? If this is the latter then how many more years do you think you have? All this matters. Can you afford any renovations now or do you need to wait till you save more?

I am trying to prepare for the no-more-stairs time in my life. As to how many years that I think I have -- I have no idea. My doc says I will be at my current health/activity level for 30 years. But how does anyone know if it is 30 years vs. 29 years, 6 months, etc? KWIM?

My intent is to continue working as long as I can. My job is stress free, commute free, and lets me interact with work colleagues and friends. I'm currently covering the cost of my kids' car insurance ($$) and mobile phones, which I will be able to drop eventually.

(I could pay the mortgage off now with my savings, but with the low interest rate, I thought I would be better off keeping my savings in HYSA/CDs/MM with interest rates at 5% and higher.)

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

PP of this comment. My condolences. I'm sorry for your loss. My suggestion is that if this is relatively recent, can you take 6-12 months by modestly drawing down your savings or finding a renter to make ends meet to give you time to adjust. Also, if you were the PP to the 30 year comment, that is a long way in the future.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

PP of this comment. My condolences. I'm sorry for your loss. My suggestion is that if this is relatively recent, can you take 6-12 months by modestly drawing down your savings or finding a renter to make ends meet to give you time to adjust. Also, if you were the PP to the 30 year comment, that is a long way in the future.

I am the same person with the health issue that is a long-term thing but major cannot-do-stairs issues are likely decades away.

My original question centered on should I sell the house as-is or should I do renovations now.

I failed to mention that there is the exclusion of $500,000 in home sale profits to consider -- this expires after 2 years.

https://www.kiplinger.com/article/taxes/t010-c001-s003-paying-taxes-on-a-home-sold-after-a-spouse-s-death.html

In the meantime, I have been using savings to cover the difference between my monthly income and monthly expenses.

What I am hearing is I should reach out to a real estate agent to get some feedback. (However, I should be cautious as they may want me to spend $ on renovations to increase their profit margin over an as-is listing.)

[Anonymous]

-Work until 70, then draw SS
-Then sell house
-Do not touch savings
-Live on the $65K plus $18K annuity
-At least put remaining cash in HYSA and $10K a year in ibonds

[Anonymous]

So sorry about your husband OP. I would only do renovations if they are relatively cheap with big bang for your buck. Especially if it is possible your house will be bought as a tear down. So if you have an outdated bathroom, consider doing a cheap reno with a local handyman of new tiles on the floor, bath fitter (plastic bath surround if the shower is ugly), new toilet, new paint on walls, and new home depot vanities. Could do it for 10K. But wouldn't do a whole kitchen. Would do a paint job on the inside and replace any old carpet. Unless it is a tear down (which you can tell from local sales in your area at 500K- did they turn those into new houses?)

Then if you sell, maybe you could get a rancher one level

[Anonymous]

Anonymous wrote:So sorry about your husband OP. I would only do renovations if they are relatively cheap with big bang for your buck. Especially if it is possible your house will be bought as a tear down. So if you have an outdated bathroom, consider doing a cheap reno with a local handyman of new tiles on the floor, bath fitter (plastic bath surround if the shower is ugly), new toilet, new paint on walls, and new home depot vanities. Could do it for 10K. But wouldn't do a whole kitchen. Would do a paint job on the inside and replace any old carpet. Unless it is a tear down (which you can tell from local sales in your area at 500K- did they turn those into new houses?)

Then if you sell, maybe you could get a rancher one level

She will have a hard time finding an inexpensive ranch home inside beltway that's cheaper than her home , or it may not in the area she would even consider living in. Ranch homes are also not very common anymore as they had been prime candidates for tear down for decades now. She may want to look into mobile home community where she would get a manufactured 1 level home with a yard, not sure how common these are, I haven't seen any in DC metro, but they are more common in other areas.

Problem with her selling the house is that it's not expensive enough to cover the move to another house (1 lvl) inside beltway. She didn't say how much she would be willing to compromise to make this happen and what lifestyle changes would be ok with her. Condo won't work for her with 3 dogs. I sense that she wants to sell (especially to get 500K tax free) and maybe needs this change, home isn't satisfying her needs anymore and is more of a burden, plus expensive to maintain. unfortunately I don't see how she can downsize without going into a suburban condo or a mobile home community or a bad neighborhood or far out into more rural and lower COL parts. She needs to talk to her kids TBH and come up with some long term plans. With RE inside beltway so out of reach for most young people her kids may want to inherit the house and could help her with the costs. Also she could rent an apartment instead of buying which is always cheaper than cost of ownership in expensive COL places.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So sorry about your husband OP. I would only do renovations if they are relatively cheap with big bang for your buck. Especially if it is possible your house will be bought as a tear down. So if you have an outdated bathroom, consider doing a cheap reno with a local handyman of new tiles on the floor, bath fitter (plastic bath surround if the shower is ugly), new toilet, new paint on walls, and new home depot vanities. Could do it for 10K. But wouldn't do a whole kitchen. Would do a paint job on the inside and replace any old carpet. Unless it is a tear down (which you can tell from local sales in your area at 500K- did they turn those into new houses?)

Then if you sell, maybe you could get a rancher one level

She will have a hard time finding an inexpensive ranch home inside beltway that's cheaper than her home , or it may not in the area she would even consider living in. Ranch homes are also not very common anymore as they had been prime candidates for tear down for decades now. She may want to look into mobile home community where she would get a manufactured 1 level home with a yard, not sure how common these are, I haven't seen any in DC metro, but they are more common in other areas.

Problem with her selling the house is that it's not expensive enough to cover the move to another house (1 lvl) inside beltway. She didn't say how much she would be willing to compromise to make this happen and what lifestyle changes would be ok with her. Condo won't work for her with 3 dogs. I sense that she wants to sell (especially to get 500K tax free) and maybe needs this change, home isn't satisfying her needs anymore and is more of a burden, plus expensive to maintain. unfortunately I don't see how she can downsize without going into a suburban condo or a mobile home community or a bad neighborhood or far out into more rural and lower COL parts. She needs to talk to her kids TBH and come up with some long term plans. With RE inside beltway so out of reach for most young people her kids may want to inherit the house and could help her with the costs. Also she could rent an apartment instead of buying which is always cheaper than cost of ownership in expensive COL places.

If one of her kids starts earning good enough money and wants to start a family and move into her house, she could have them take care of all the issues and maintenance and also have them rent her a 1 bedr apartment nearby in a building with amenities. It might be cheaper for the kid to do than to purchase their own home with the current prices and interest rates..

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

PP of this comment. My condolences. I'm sorry for your loss. My suggestion is that if this is relatively recent, can you take 6-12 months by modestly drawing down your savings or finding a renter to make ends meet to give you time to adjust. Also, if you were the PP to the 30 year comment, that is a long way in the future.

I am the same person with the health issue that is a long-term thing but major cannot-do-stairs issues are likely decades away.

My original question centered on should I sell the house as-is or should I do renovations now.

I failed to mention that there is the exclusion of $500,000 in home sale profits to consider -- this expires after 2 years.

https://www.kiplinger.com/article/taxes/t010-c001-s003-paying-taxes-on-a-home-sold-after-a-spouse-s-death.html

In the meantime, I have been using savings to cover the difference between my monthly income and monthly expenses.

What I am hearing is I should reach out to a real estate agent to get some feedback. (However, I should be cautious as they may want me to spend $ on renovations to increase their profit margin over an as-is listing.)

Yes, this is what you should do. And I really don't understand all these people saying a realtor wants you to do renovations just for themselves. Honestly, an AS-IS sale can be much, much harder to sell (unless you are going to go the investor route, in which case you will get a very low ball offer), but actually an easier transaction. Get a good, reputable realtor who you can trust and will be honest with you. Not all realtors are out to screw you. Actually, most are not. Find someone who works with seniors on a regular basis.

[Anonymous]

I'm sorry for your loss OP.

Don't move. Slowly fix up your house yourself (with your kids). Basic painting, replacing floor helps a lot.
Get a roommate tenant for some extra income. Another nice single woman.
Slowly get rid of the dogs. 3 is too much and too expensive.
Have kid help a bit with expenses when he/she moves back in- cheaper than rent, but $300/month could help you alot.

Then you can move in a few years.

[Anonymous]

RE: the $500k exemption expiring on capital gains from the house sale, you will still have $250k. Since you still have a $300k mortgage, I'll assume you bought the house at $400k, so if you sell it, you can net $650k without owing any tax. This means don't worry about missing out on the $500k capital gains exemption. Take that worry off of your plate.

[Anonymous]

You'd benefit from retirement planning, probably with assistance from a fiduciary like Vanguard or Fidelity, e.g., https://investor.vanguard.com/advice/personal-financial-advisor

As part of the planning process, you need to refine your vision for the long-term, i.e., will you still have 3 dogs, what kind of housing do you want to live in when you're more frail or begin to experience physical or cognition issues, can no longer drive, etc? Aging in place requires more than the installation of a stairlift or elevator and replacing door knobs with lever mechanisms. Do you want to move to a CCRC and, if so, how will your financial resources match up with those costs?

With respect to your house, continued deterioration will probably result in it being eventually purchased so that it can be torn down and replaced with a more modern design, so it may not make sense to put a lot of money into it except to the extent necessary for your health and safety. This is especially true if you have seen such in-fill activity in your neighborhood already, where older homes are replaced by larger and more modern designs.

Start with retirement planning, since your future financial resources will define your future options. And, as previously noted, holding such a large percentage of your portfolio in cash for the long-term is unwise. You'll be much better served, and more likely to stay ahead of inflation, with a balanced portfolio of low-cost diversified bond and stock ETFs in an asset allocation appropriate to your goals and timelines.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

PP of this comment. My condolences. I'm sorry for your loss. My suggestion is that if this is relatively recent, can you take 6-12 months by modestly drawing down your savings or finding a renter to make ends meet to give you time to adjust. Also, if you were the PP to the 30 year comment, that is a long way in the future.

I am the same person with the health issue that is a long-term thing but major cannot-do-stairs issues are likely decades away.

My original question centered on should I sell the house as-is or should I do renovations now.

I failed to mention that there is the exclusion of $500,000 in home sale profits to consider -- this expires after 2 years.

https://www.kiplinger.com/article/taxes/t010-c001-s003-paying-taxes-on-a-home-sold-after-a-spouse-s-death.html

In the meantime, I have been using savings to cover the difference between my monthly income and monthly expenses.

What I am hearing is I should reach out to a real estate agent to get some feedback. (However, I should be cautious as they may want me to spend $ on renovations to increase their profit margin over an as-is listing.)

Ok. I'm this PP. Yes, reach out to a real estate agent to get some feedback and be cautious. Why not just go ahead with the renovations? There is a difference between what you gross and what you net (i.e., deducting expenses incurred). For example, if the kitchen renovations are estimated to be $20K and you can sell the house for $550 without renovations and $565K with renovations, then you are actually netting less money (565-20=445). The realtor however earns more on the sale of a $565K house than a $550K house. If the house is not top of the market condition, you need to price it competitively for the condition or price high and be willing to drop quickly if someone does not buy the first weekend or so.

However, can you find something with what you will net from the house that you can buy outright? Remember interest rates are likely higher than on your current house. So, you might be trading one mortgage challenge for another, albeit with less accessibility concerns. Other people have spoken about challenges associated with your three beloved dogs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I'm confused. Are you OP? Is this all a sock puppet? Given OP's young age (61) and retirement resources, OP should examine why he/she is not able to cover monthly expenses and how moving would improve that. Can expenses be cut? Can OP get a roommate? Also, OP does not seem to be factoring in moving expenses and expenses associated with the new place to live. Rarely do furniture, window treatments, rugs work perfectly and that costs money.

I am the OP. My husband died and he was the majority breadwinner.

PP of this comment. My condolences. I'm sorry for your loss. My suggestion is that if this is relatively recent, can you take 6-12 months by modestly drawing down your savings or finding a renter to make ends meet to give you time to adjust. Also, if you were the PP to the 30 year comment, that is a long way in the future.

I am the same person with the health issue that is a long-term thing but major cannot-do-stairs issues are likely decades away.

My original question centered on should I sell the house as-is or should I do renovations now.

I failed to mention that there is the exclusion of $500,000 in home sale profits to consider -- this expires after 2 years.

https://www.kiplinger.com/article/taxes/t010-c001-s003-paying-taxes-on-a-home-sold-after-a-spouse-s-death.html

In the meantime, I have been using savings to cover the difference between my monthly income and monthly expenses.

What I am hearing is I should reach out to a real estate agent to get some feedback. (However, I should be cautious as they may want me to spend $ on renovations to increase their profit margin over an as-is listing.)

Ok. I'm this PP. Yes, reach out to a real estate agent to get some feedback and be cautious. Why not just go ahead with the renovations? There is a difference between what you gross and what you net (i.e., deducting expenses incurred). For example, if the kitchen renovations are estimated to be $20K and you can sell the house for $550 without renovations and $565K with renovations, then you are actually netting less money (565-20=445). The realtor however earns more on the sale of a $565K house than a $550K house. If the house is not top of the market condition, you need to price it competitively for the condition or price high and be willing to drop quickly if someone does not buy the first weekend or so.

However, can you find something with what you will net from the house that you can buy outright? Remember interest rates are likely higher than on your current house. So, you might be trading one mortgage challenge for another, albeit with less accessibility concerns. Other people have spoken about challenges associated with your three beloved dogs.

Apologies - typo acknowledged - 565-20=545

[Anonymous]

OP, selling is really expensive when you consider closing costs, fees, etc. Why not stay where you are? Maybe talk to your doc and get prescribed PT to work on mobility issues. The kid graduating in a few years may end up making $65k or more. Have the kid contribute 1/2 utilities and $500 per month rent plus their groceries. Nowhere will they find a better deal. It would be win win for both of you.

[Anonymous]

Anonymous wrote:You'd benefit from retirement planning, probably with assistance from a fiduciary like Vanguard or Fidelity, e.g., https://investor.vanguard.com/advice/personal-financial-advisor

As part of the planning process, you need to refine your vision for the long-term, i.e., will you still have 3 dogs, what kind of housing do you want to live in when you're more frail or begin to experience physical or cognition issues, can no longer drive, etc? Aging in place requires more than the installation of a stairlift or elevator and replacing door knobs with lever mechanisms. Do you want to move to a CCRC and, if so, how will your financial resources match up with those costs?

With respect to your house, continued deterioration will probably result in it being eventually purchased so that it can be torn down and replaced with a more modern design, so it may not make sense to put a lot of money into it except to the extent necessary for your health and safety. This is especially true if you have seen such in-fill activity in your neighborhood already, where older homes are replaced by larger and more modern designs.

Start with retirement planning, since your future financial resources will define your future options. And, as previously noted, holding such a large percentage of your portfolio in cash for the long-term is unwise. You'll be much better served, and more likely to stay ahead of inflation, with a balanced portfolio of low-cost diversified bond and stock ETFs in an asset allocation appropriate to your goals and timelines.

+1 for a financial planner and not a real estate agent.