Is it worth paying extra 75k when buying a home which has upgrades worth more than 100k?
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bummer77
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So we really like this single family home (priced at 850k) and the seller (living in it for over a decade) has done an amazing job of upgrades (may be some are more than necessary). The upgrades, inside and out, are definitely worth more than 100K. The selling price set is above 75k for similar homes in general vicinity. It's on a cul de sac but the deck/backyard overlooks a road which is medium-busy with a speed limit of 35 miles. But it's all fenced in.
The houses in the area have appreciated about 4-5% over the last several years. The question is, is it worth giving that extra 75k for 100k worth of upgrades- given that we pretty much like everything else about the home? Does it affect the appreciation in future, given you're paying more right now? Any thoughts or ideas are appreciated! Thanks! |
Anonymous
| How long has it been on the market? How long do you plan on living in it? My parents sold their house that had 300k put into it but only got a 150k premium on it. At some point you're putting more into it than you will get out of it. |
Anonymous
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Bid the market for a renovated older home. Period.
No one recupes more than 50 cents of the dollar on a renovation. Unless it’s a rapidly appreciating market- which it hasn’t been around here in a long time. I suppose that the $800k price point there is some marginal appreciation since you can get a Gov’t conforming loan |
Anonymous
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And the reason new builds trade at a premium to renovated is there is zero deferred maintenance to worry about (thho thibgs certainly can break witching five years.
Older homes need new hvacs and a roof every 20-25 years, new pending, new driveways, boilers, appliances break, garage door openers, decks, etc. Was that all replaced during the ~$100k Reno? |
Anonymous
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The first question is whether the upgrades are worth it to you. Do you like them/will you appreciate them or enjoy them?
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bummer77
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It's been on the market for only a few days but it's a Redfin 'hot home' and homes are selling here like hot cakes. I think we'd have to stay here for at least 7-10 years to get some good appreciation. So I understand that this is for a long haul.
And yes, it's about 20 years old. So old enough. |
bummer77
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| For most part the upgrades are in line with our taste. A couple of things here and there can be overlooked. |
Anonymous
| On resale you are not going to get it back. |
Anonymous
| As someone who has renovated a home, it would be glorious to not have to do that. Huge pain in the a$$ and always much much more money than anticipated. |
Anonymous
+1, I am having trouble understanding the dilemma. OP likes the house, likes the renovations, couldn't do the renovations herself for the what the seller is asking, and won't have the hassle of remodeling. Win. Just buy the house you want to live in and can afford. Appreciation is only realized when you sell (or second mortgage) and it sounds like you plan to be here long term. |
Anonymous
Sure, but OP is ina hole either way. Most people buying 800k homes are also putting money in. OP can put 125k of her own money in to a home without updates, but priced 75k lower than this home or buy this home for 75k more than the basic home bbn without updates. Either way OP is in the hole. One a bigger hole than the other. |
Anonymous
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Do you like the upgrades? Would you do such upgrades if you buy a similar houses nearby?
If the answer is yes buy. You may not get it back when you sell, but homeowners don't do upgrades just to get their money back. They do it to enjoy the comfort of their home. Go for it if the house is priced well and it is within your budget. |
Anonymous
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If it's only been on the market a few days and is already a Redfin "hot home" where houses are selling like hotcakes, it doesn't really matter whether or not you're wiling to pay for the particular upgrades--they will get multiple offers.
Price your offer based on how much you're willing to pay to have this house. For some buyers the upgrades may factor in, while for others the location might. Some people may not bid with a yard fronting a busy street. If the seller's realtor is worth his/her salt, he or she has made a best guess at how much above comparable homes people may be willing to pay and has guided the seller accordingly--and if they've had that many views in just a few days, it sounds like the realtor was on point. |
Anonymous
This |
Anonymous
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From a resale perspective, you're almost always in a much better place to be the cheapest house on the block than the most expensive.
But, there's a difference in being the $900k home when the others around you are $800k versus $900k compared to $450k. If you're looking at the long-term for the house, and the general price and type of finishes and upgrades are in line with the neighborhood expectations, then you may be happy to avoid the hassle of renovating yourself. |