Remodel current home or sell and purchase newer home? (Prescott: real estate market, mortgage)

[inderocker]

We bought our home in Prescott during the housing price lull (2012) and got a pretty good deal on it. It's not our dream home by any means, but it does have it's appeal. It's in a good neighborhood, close to schools, shopping, and work... however, it was built in the late 50's and is really showing it's age. being fairly new to the housing game, we're not really sure if we should mortgage the equity we have in the house to fix it up, or sell it as is and use the equity as a large down on a new house.

Any advise would be appreciated! Thanks!

[BriansPerspective]

It sounds like you are not enamored with the home and you are not overly experienced in remodeling. If so, then you are probably better off selling the house as it is and buying something more to your liking. Fix any significant maintenance items including paint and flooring if it is in poor condition or is outdated (e.g., pink carpet). Typically, improvements are not going to net you a dollar for dollar return on your investment. Improvements will likely increase the buyer pool however, because many more people want a move-in ready home and fewer people want a fixer-upper. Also, since the house was built in the 50's, then any major remodeling will require contractors who are licensed to work with lead-based paint and asbestos (i.e., cha-ching).

Keep in mind that the local real estate market prices rise and fall as a unit. While your house went up in value, so did any house that you are going to purchase. On the bright side, your equity should parley into a larger down payment for the home you will purchase.

[flint8ball]

Well said,as usual, Brian.

[Woody01]

If the house is in a neighborhood that you like, and it has a floor plan you can deal with....then you might want to consider a remodel. If not, then move on.....

[HollyhockGarden]

Lot size is important to many buyers. Is your home on a larger lot? 10,000+ sq ft? Does it have a view? Quiet but convenient location? You said it is close to your job(s) which can be a huge advantage.

There are so many variables to think about. As the previous poster stated, if you like the neighborhood, you may want to consider staying. What is happening to other homes in the neighborhood? Are other buyers renovating? Does the neighborhood seem to be on the upswing? Have you actually looked at newer homes that you may be able afford? What are the neighborhoods and lot sizes like? How far is the commute to work and shops? Schools and churches? Parks?

Try making a chart with the pros and cons of remodeling vs moving to a different home. Perhaps you will need to get a couple of estimates from contractors as to what a remodel will actually cost. Go through some model homes and open houses for ideas in your price range.

Good luck!

[inderocker]

Originally Posted by HollyhockGarden

Lot size is important to many buyers. Is your home on a larger lot? 10,000+ sq ft? Does it have a view? Quiet but convenient location? You said it is close to your job(s) which can be a huge advantage.

It's on a smaller lot, <8,000sqft. No view. Very convenient, but not quiet (not Rosser busy though).

Originally Posted by HollyhockGarden

Try making a chart with the pros and cons of remodeling vs moving to a different home. Perhaps you will need to get a couple of estimates from contractors as to what a remodel will actually cost. Go through some model homes and open houses for ideas in your price range.

We've done some internet browsing over the past year and found that homes built this century <$400k are far and few between, but they pop up from time to time.

[inderocker]

Originally Posted by BriansPerspective

It sounds like you are not enamored with the home and you are not overly experienced in remodeling. If so, then you are probably better off selling the house as it is and buying something more to your liking. Fix any significant maintenance items including paint and flooring if it is in poor condition or is outdated (e.g., pink carpet). Typically, improvements are not going to net you a dollar for dollar return on your investment. Improvements will likely increase the buyer pool however, because many more people want a move-in ready home and fewer people want a fixer-upper. Also, since the house was built in the 50's, then any major remodeling will require contractors who are licensed to work with lead-based paint and asbestos (i.e., cha-ching).

Keep in mind that the local real estate market prices rise and fall as a unit. While your house went up in value, so did any house that you are going to purchase. On the bright side, your equity should parley into a larger down payment for the home you will purchase.

Who would have thought the realtor would advise me to sell? j/k

I guess I'm most concerned with dumping money into a house I may never see a return on. Since we bought low initially , I don't mind buying high this time as overall it still correlates into a net gain for us based on the equity we've accumulated in our house.

[like-2-hike]

Originally Posted by inderocker

Who would have thought the realtor would advise me to sell? j/k

I guess I'm most concerned with dumping money into a house I may never see a return on. Since we bought low initially , I don't mind buying high this time as overall it still correlates into a net gain for us based on the equity we've accumulated in our house.

You know your situation better than anyone else, but a good realtor could give you advice on whether investing in remodeling makes sense.

Each of the homes I've bought here I've remodeled. I've invested anywhere from $15k to $60k on them. Overall, I'd happily do it again because it improves my quality of life and enjoyment of my home, but it definitely introduces plenty of stress while the remodel is going on. There's a reason plenty of people only look for move-in-ready, and there's a reason why flippers exist.

It's getting *very* difficult to find and schedule good contractors in town (and/or you'll pay a lot more than you might have in 2012).

If it were me, I'd engage a realtor and selectively remodel if I planned to stay a few more years, but if you're thinking of selling soon, just consult a realtor on what they think needs to be done to sell (if anything). I only remodeled one home with an eye towards immediately putting it on the market, and that was to make it more sellable (it was a unique home and was going to be challenging to get comps on). I wanted to avoid that when I sold it.

Good luck!

[BriansPerspective]

Originally Posted by inderocker

Who would have thought the realtor would advise me to sell? j/k

I guess I'm most concerned with dumping money into a house I may never see a return on. Since we bought low initially , I don't mind buying high this time as overall it still correlates into a net gain for us based on the equity we've accumulated in our house.

Ha. If you said you liked the house, I probably would have said, "Stay and fix it up." Without seeing the house, it's impossible to say whether an improvement would add value or have zero return on investment. With your personal home (i.e., not an investment property), there is a balance that only you can determine. If every improvement decision is based on resale value, then you may lose some enjoyment. Some improvement money for a personal residence is simply throw-away money. You do it because you like it.

We have remodeled investment properties and our personal homes. For investment properties, 100% of the decisions are based on return on investment. For our personal homes, very few decisions are based on cold economics. We overbuilt our last personal home. The neighborhood could not support our improvements, so we lost money when we sold it. So be it. We enjoyed the home and we enjoyed our improvements.

[The Dells]

Originally Posted by inderocker

We bought our home in Prescott during the housing price lull (2012) and got a pretty good deal on it. It's not our dream home by any means, but it does have it's appeal. It's in a good neighborhood, close to schools, shopping, and work... however, it was built in the late 50's and is really showing it's age. being fairly new to the housing game, we're not really sure if we should mortgage the equity we have in the house to fix it up, or sell it as is and use the equity as a large down on a new house.

Any advise would be appreciated! Thanks!

From the perspective of a couple that has been looking around in the Prescott area for a few years as a retirement move we have found that most older homes (with lots of charm and good location) are terribly overpriced. They are overpriced because they need so much work. There seems to be little listing price difference between a older home that has had no renovations and updates or an older home that has been completely redone. The actual selling price may be a different story. Then you have a massive amount of lipstick on a pig flips listed for a $100,000 more than it sold for 6-12 months ago. There are some high quality renovation / flips but those are few and far between.


If I was looking at your home I would prefer that unless you did things in a high quality craftsmanship like manner leave it alone. The neutral paint color you chose probably won't be to my liking. If you painted the brick fireplace that is an instant disqualification. Painting the walls, ceiling and baseboard all the same flat color is no bueno. Painting stucco or any kind of masonry is tell tale LSOAP. It ruins it by sealing in moisture. Either fog coat of restucco. Plastic paint only holds in the moisture. If it can't dry it will die. The entire Prescott area (the flippers) seems to be in love with vinyl wood plank flooring. Yuk.


Bottom line, too many homes (a glut) in the Prescott area have never been updated. Lets face it, it used to be an inexpensive place to retire to that has become popular in recent years. People that have lived in Prescott a long time generally did not have much money to fix their homes up. Crappy flipping is rampant. So before you let a cut rate painter come in with a high volume sprayer and paint your brick. stucco, garage door, eves and front door the same color with the same paint and blow overspray everywhere realize that you may be putting yourself in the same category (LSOAP) as so many others.
If you have a nice, charming, unrenovated older home in a good location market it as such and price it accordingly. You can always hire Joe Blow's Discount House Painting at a later date if you feel that is what you need to do.