Purchasing a home isn’t the same as you’ve seen on TV
PHOTO CONTRIBUTED BY BOBBY + APRIL / EASTMAN CREATIVE
Turn on the television and you’re likely to find a reality home renovation show within the first few clicks of the remote control. For real estate enthusiasts, binge-watching shows like “Property Brothers,” “House Hunters,” “Fixer Upper” and “Million Dollar Listings” is a guilty pleasure. Viewers get a chance to explore exotic properties from around the world, and get exclusive access behind otherwise closed doors, all without having to leave the comfort of their couch. The real estate business as portrayed on reality television is often easy and exciting. But if you’ve ever purchased a home, you know that finding your dream property and making an offer isn’t as easy as a well-produced reality show would lead you to believe.
What TV doesn’t show you is that the reality of purchasing a home often takes time. Homebuyers will tour multiple properties before making an offer, and negotiations aren’t finalized after making a single phone call. In addition if you are thinking of doing some updating, home renovations take serious strategic planning and don’t always run smoothly. “On TV everything goes perfectly. The tile, cabinets and sub-contractors arrive on time, but they overdramatize the problems they find,” chuckled Class “A” Contractor Bobby Hicks, about how reality television can portray an unrealistic home-renovating process. “It seems like they always find some $50,000 problem. Rarely do we run into overages like that.”
The drama makes for good television, but wrapping up one of the biggest financial decisions in your life in 30 minutes, minus the time for commercial breaks, just isn’t realistic.
These eight tips will help you navigate the local real estate market, and leave the drama to the television networks.
IT TAKES TIME
“I always like to start the first day of house hunting by saying, ‘We are going to look at some stuff. We aren’t going to find your house today, but rather get an idea of what your house is going to look like,’ ” said realtor April Straus, the Principal Broker at Bobby + April, a concierge real estate company that focuses on buying, selling and helping with renovating historic homes in Richmond. “But, sometimes on that first day, you do find your house and you are just like, ‘Woo hoo!’ Then there are other clients who I looked at over 50 houses with over six months.”
Straus advises her clients to keep an open mind when touring a home because sometimes a house grabs you unexpectedly. She typically shows clients between 12-18 homes, not including possibly taking them through renovation job sites to show them various ideas, including how a home could be laid out. Straus wants potential clients who have the preconceived idea that they’re going to find their dream house after looking at only three homes to know that it just isn’t realistic. It really depends on what Richmond’s real estate inventory looks like on any particular day - and for the past few months it has been very tight,
Kendal Thompson, a realtor at Bobby + April, typically works with clients who are interested in purchasing a historic home in an iconic Richmond neighborhood. He says that he understands the frustrations his clients feel sometimes when they don’t find the right home straight out of the gate. He says that when realtors are frustrated, their clients are feeling the same way. “A lot of places in The Fan are like books,” Thompson said of the unique properties that homebuyers can find throughout one of Richmond’s most well-known neighborhoods. “The covers are all the same and when you open the front door you are like, ‘Wow!’ This is nothing like the one next door!”
BE FLEXIBLE AND REALISTIC
“I think that the biggest problem is that people are not flexible in what they think they want,” Straus said. “What you want, what you can afford and what’s available are not always going to be the same.” Homebuyers should spend time evaluating the features they’re willing to compromise, and determine which features are essential for their realtor’s must-have list. Not only does this keep everyone on the same page, but it also helps homebuyers evaluate the market and determine which homes are a potential match.
For instance, if a large backyard is on your must-have list, you may need to compromise on which neighborhood you want to live in. Or you may be willing to forego a fireplace but won’t budge when it comes to school district.
“It’s that HGTV syndrome. People see it and don’t understand that’s not how it really works,” Thompson said. “I have clients that come in and say, ‘I want an open floor plan, we want to be in this neighborhood, four bedrooms, top of the line appliances, but we can only spend this much.’ What they described is a house that in actuality costs significantly more than what they are willing to pay if they stay in that location.”
GET MORE HOUSE
“People come in with a hard and fast idea of where they want to be and what they want, but I think that’s a mistake that home buyers can make because it leads you to the wrong place everywhere else like the wrong financing or renovation strategy,” Straus said. Though most of her clients know they want to purchase a historic home, few realize the cost differential of purchasing a home that’s move-in ready compared to renovating it to become their dream home.“You can usually get more if you do it that way because the pricing is so much better to renovate it than buying it already done, but you have to be ready for the time and energy involved in a project,” explains Straus.
Straus said most of her clients who choose to renovate add an extra bathroom, update a kitchen, or add more square footage to the property. Dividing up a home renovation into stages is another option some homebuyers may consider. Thompson warns clients to be sure to lay the groundwork first for potential work in the future so that when you start the second phase, the proper foundation is in place. This is especially true with plumbing -- be aware of where you want to add new or additional washer and dryer hookups, or if you may want to add an additional bathroom.There are a variety of renovation mortgage programs available for homebuyers who want to borrow based on the home’s projected post-renovation value.
DO YOUR HOMEWORK
If you decide to buy something that needs work, be sure that before you start swinging a sledgehammer at your walls, you have considered all the issues.“When you buy a house with an as-is addendum (giving you limited options for repairs before closing), I think a lot of people are looking at the price, but they don’t look at the hidden things” Hicks cautioned. One of the first things he does when inspecting a property is head straight to the basement to check out how electricity is being serviced. “When there are fuses, it’s a disaster. It’s just not as safe as circuit breakers,” Hicks said. He estimates that is costs roughly $10,000-$20,000 to rewire a typical house that is an average size, and that price tag doesn’t include fixing damaged walls after the job is done. In addition to high costs, if the home has knob and tube wiring, homeowners may face obstacles securing a mortgage and homeowners insurance.
“Many realtors are looking at the price (of a home) and saying, ‘Oh my gosh! The hardwood floors are in great shape and it just needs a kitchen.’ But they aren’t looking at these old houses’ electrical and HVAC situation,” Hicks said. “Everyone is concerned with kitchens and bathrooms.” Homebuyers could spend $30,000-$40,000 to update these systems, and that’s not factoring in the condition of the roof. Though most homeowners don’t like spending money on the mechanicals or the structure, all of those updates need to be completed before work on the cosmetic updates to a home can begin.
MAKING IT YOUR OWN
“Buying an older home is like buying a used car. Someone else has been in this house and they have been using it in a way that you probably wouldn’t have wanted them to,” said Tolson Musick, a realtor with Bobby + April. “You have to be prepared that when you walk in, there will be things that need to be fixed.” Musick suggests setting aside roughly $3,000-$4,000 just for cleanup and small cosmetic restorations to make your new home truly your own. Some of the most common updates that can instantly polish a new space are applying a fresh coat of paint, refinishing wood floors and updating hardware.
“If you plan to have the floors redone, always do that before you move any furniture into the house,” Straus advised. “It saves a ton of money.”Straus also suggests that homeowners consider new toilet seats, shower heads and new locks when they move into a new home, as well as their landscaping needs. Do you need a lawn mower or rakes? How about a grill?
Homebuyers need to do their research and take stock of their plans before making an offer on any home.
“You need to see how a neighborhood is changing,” Straus explained. “Some neighborhoods are changing for the better, and then there are some neighborhoods that are changing for the worse.”
Straus explained that there are a lot of areas of town, such as in the far Southside and West End, that are declining in investment potential. That means that the house may not be worth more in the future than what homebuyers would pay today. She says that this typically happens in neighborhoods because new developments are built nearby with homes in the same price range. “Who wants used when you can buy brand new?” she asks. “You want some growth for your investment dollar on a home. … If you pay $200,000 for a house and it’s worth $185,000 in three years, that’s just a bad situation.”
If you’re a parent, or planning to become one in the future, research education options in the neighborhood and find out if the options align with the plan you have for your family. Are there enough bedrooms for everyone? Where do I want to send my kids to school? How do the neighborhood schools rate? When planning to stay in your home for many years to come, you may want to consider transportation options in the area that will allow you to age in place and maintain an active lifestyle without driving.And if you’re renovating a historic home, it’s also a good time to consider installing an elevator or constructing a first-floor master bedroom and full bath.
But don’t forget your current lifestyle. “Is the home close to the things you like to do?” Straus asked. “If you want to bike or kayak, is the home near enough to those activities? If you want to be able to walk to dinner, can you do it in your high heels or do you need sneakers?”
HERE TODAY, SOLD TOMORROW
“A house on Hanover Avenue went on the market two weeks ago and I had to beg to get in the first day,” Straus said. “My clients loved it. I said, ‘Quick, make an offer, because it’s going to be gone.’ They wanted to sleep on it overnight – the seller had eight offers in the morning.” If a house is priced well and is located on a well-known block, you need to jump if you’re interested. There are a few popular streets in the Museum District and The Fan that sell like hotcakes. Do your research, have your pre-approval letter ready and be ready to make an offer if you’re looking at a home on Hanover Avenue, Stuart Avenue, Kensington Avenue, Grove Avenue or parts of Floyd and Park avenues.
The realtors at Bobby + April say that the Richmond market is so hot right now that it’s not uncommon for houses to sell before they are officially listed by a realtor. Thompson explained that neighbors talk to each other, and if they know someone has an interested friend or buyer waiting on a specific block, there’s no point of even getting a for sale sign in the yard. “I mean, neighbors are waiting for it because they are ready to move just 50 feet to get in there,” Thompson said of some highly sought properties.