What Ever Happened to the Fixer-Upper?
CNBC Real Estate Reporter
I’m not going to talk about mortgages today. I’m not tired of the topic; I just want to remind myself that there are other stories playing out in the real estate market. Lest we forget, people are still buying and selling homes, legally and responsibly, and I want to focus on that for a minute.
I spent several hours this week with an interior designer who is being tapped by several real estate agents to help stage and remodel homes that are about to go on the market. Yes, remodel. We’ve done stories on staging, the practice of rearranging, organizing and cleaning up a home to put its best foot forward when it goes on the market. But in a slow market like we’re seeing today, stressed out sellers are doing all they can to insure that they can not only get a good price for their home but that they can get the home sold at all. They are embarking on mini-remodels for the sole purpose of selling.
The decorator took me through a town home, three levels, about 20 years old. It definitely needed a paint job, a thorough clean-out to, as they say in the biz, “depersonalize” the space, but the seller was going way beyond that: new kitchen appliances and countertops, all new Toto toilets in every bathroom, new paint and new carpet throughout the house, new wood floors in the basement…I could go on. Total retail value of the remodel: $50,000. Come ON.
“Competition, it’s the competition in the marketplace,” says interior designer Kim Vreeland. The realtor involved in the sale agrees, and says today’s buyers can afford to be picky.
“They want to move into a house, they want to enjoy it from the moment they move in, maybe make some additional changes here and there, but minimal,” says Bernice Fox with Long and Foster.
Ok, I get it, it’s a competitive market out there, and with lots of inventory to choose from, the house with the granite countertops is going to be far more appealing than the one with formica. But how far is too far, and will the cost really recoup?
According to a report by Remodeling Magazine, most home renovations recoup about 80% of their costs in the sale price. So why do it?
“It’s really the difference between selling it tomorrow or next month and having it sit on the market for five or six months,” says Sal Alfono, the magazine’s editor in chief. So it’s all about time.
And I get time. Look, there aren’t a lot of people who want to spend 6 months living in soot while questionably legal workmen traipse across their dusty hardwoods carrying buckets filled with toxic goop. I’ve lived through a renovation myself, and there are trying days as well as crying days. But I have to say this, overall, I enjoyed putting my personal touch on my house, and I don’t know that if I were in the market for a new home that I would necessarily want it to be totally done for me. I mean, there’s a certain appeal to a certain amount of fixing up, putting your imprint on a piece of neighborhood history.
What is it about today’s buyers, so fixed on finishes, so gaga over granite, so jacked by Jacuzzis that they have lost sight of all creativity? Sellers seem to think that if there’s even a small chunk of grout out of place, they’ll end up in the poor house on the price. Maybe I’m naïve, I know it’s tough out there today. Buyers can be choosers and sellers know it. But let’s everyone remember, a house is a money pit, and no matter how perfect it looks the day of the closing, you know the hot water heater is just waiting to throw cold water on your house warming party.
Questions? Comments? RealtyCheck@cnbc.com