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First-timers look to bag bargain

The pack rat: these homes are crammed full of clutter and as a result, often sell well under the market value

Dear Heather,

We are first-time buyers, buying on a limited budget, and we have seen a very reasonable property but it does need work on the interior. Are there opportunities in this area of the market, and should we offer less because it needs work?


Dear Buyer,

As an agent, what I notice in first-time buyers is that because they watch a lot of HGTV, they (unsurprisingly) want their first home to be decorated like something out of a magazine, closely resemble their dream home AND be affordable! Which is a tall order for a starter home.

There are three questions you need to look at when buying a first home: Will it mostly fit our needs and family? Is it affordable? And is it in a good location?

Having found something you like, the chances are it will need some attention to turn it into your very own castle. However whether a house REALLY needs work is based on opinion.

Not everybody agrees on the condition of a home. Sometimes sellers will ask if they should fix up a home or sell “as is” and, while certain repairs will bring more money, some types of improvements are better left as an option for the buyer. For example, if the wall-to-wall carpeting is worn and stained, it is generally a good idea to replace the flooring before selling. However, you would be foolish to haul a cedar bar to the dump simply because it’s a certain vintage.

Houses that need work

Since work is often in the eye of the beholder, one thing you should not do is to presume that the listing price has not already been adjusted for the fact you are buying a home that needs work.

Most sellers already realise the home needs work and have accounted for it when pricing the home.

I’ve yet to find a seller who is willing to subsidise a buyer’s home improvement dreams. Yet that doesn’t stop buyers from trying to discount an already discounted price.

The fixer-upper house

Fixer-upper homes are generally priced for a sale in their “as is” condition.

These homes often show deferred maintenance because the sellers were unable or unwilling to properly care for the home. Maybe there has been a death, or it passed through probate to heirs who don’t want it.

To compute a price on the fixer-upper house, sellers will generally choose a sales price based on the comparable sales and then they further reduce the price by the estimate for repairs. They might deduct a little bit more from the price to make it attractive to buyers.

If the home has been on the market for a while, it could be that it needs more work than the seller first realised.

Newer but outdated house

You spot this a lot in condominiums. A once buoyant rental market, could have now made them difficult to rent.

While popular at the time, supply can now exceed demand. Owners often have little interest in remodelling a home that is 15 to 20 years old. After all, they figure the home was fine when they bought it, and it’s fine to sell it now. What they don’t realise is buyers aren’t receptive to homes without updates.

Buyers want turnkey homes; homes that don’t require any work. If they have to put work into a home by tackling a home-improvement project, they expect a discount. However, this is often where buyers go wrong.

If the bathroom taps work and the toilet flushes, do you really need a complete new bathroom, or could it wait a couple of years?

My bet is, it would serve you just fine with a new coat of paint, a nice shower curtain and some new towels. Same goes with a kitchen. If the cabinets are in fairly good shape, why not paint or varnish them? Put on new hardware, and maybe change the countertops. If it’s not a huge kitchen a few new tiles on the floor, a new backsplash and a coat of paint on the walls can make a huge difference.

Also, sometimes it pays to live in the house for a bit before making any major renovations. Often you see things from a different perspective after three or six months of occupancy.

The pack rat house

Not every messy house is a pack rat house but the pack rat houses can present problems in the way that you cannot “see” everything.

These are the homes where you might need to navigate through on tight paths woven around stacks of personal belongings throughout the house. Sometimes the bedrooms are so full of furniture and boxes that you can’t get the door open. Pack rats collect and save stuff, and sometimes are attracted to odd things!

Combine a pack rat house with years of neglect, and you have something very interesting — with possibly a few surprises. It definitely pays to have a structural survey done on this type of home and oftentimes, unfortunately for the seller, these properties can sell well under market value.

So bottom line is that it is likely a property needing some upgrades has already been discounted to compensate for the renovations. However, it’s always worth making a solid offer and seeing where the negotiations go from there.

Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 27 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate