Comments on: Home Maintenance Woes from the Weary

By: Pat Meyers

Pat Meyers — Wed, 17 Sep 2008 19:34:43 +0000

Hey! That second house used to be mine! By the looks of the pictures they haven’t updated anything since I move out(including carpet)15 years ago. Even the blinds on the windows are the same. No way its worth $325K or even close.

By: Joe Dahleen

Joe Dahleen — Thu, 17 Jul 2008 17:57:52 +0000

Fixer’s – most don’t remember the FHA 203K loan. It allows you to purchase a home and fix it up.
urchase or Refinance!

Qualified Transactions

* Purchase and Renovate a home- Short Sales, Foreclosures, “Fixer-Uppers”, Etc.
* EEM Refi- Energy Efficient Mortgage Upgrades, including SOLAR OK.-
* Work with local remodeling contractors

What is Renovation Lending?

* Renovation Lending is simply adding the cost of repairs and improvements into the mortgage to purchase or refinance a home.
* A Renovation Mortgage is a single, first lien position mortgage

Property Types:
* Same that qualify for FHA-OO
* 1-4 units, including converting a 1 unit to a 4 unit or a 4 unit to a 1 unit.
* Condos and town homes- interior renovations only

google HUD-92700 and see the work sheet.
Because it is FHA you to Note: 203(k) and Streamlined (k) mortgages are subject to UFMIP

By: tera.randall

tera.randall — Thu, 17 Jul 2008 16:47:19 +0000

A. Robbins:

Interesting formula. I’ve never seen it laid out in that way. I think between $600K and $649K in Mercer Island is a good deal for this home if the buyer has the intention to 1) make financially-smart upgrades and 2) has a desire to actually live in the home for the next three to five years, allowing the market to heat up again and the seller to reap maximum earning potential.

By: tera.randall

tera.randall — Thu, 17 Jul 2008 16:42:50 +0000

Frank: You are very correct that we have made developments that keep our materials and homes lasting longer. One interesting thing I read in the NAH study was that many of the modern, green appliances (refrigerators, ovens) have a shorter life span than older products. They don’t last as long, but their impact on the environment during the life cycle has been decreased. Catch 22!

Perhaps as sustainable building becomes more common, we’ll have green specials!

By: A. Robbins

A. Robbins — Wed, 16 Jul 2008 23:24:13 +0000

Regarding the three fixers you list… The last one is a teardown – value is only in the land. The others are fixers needing a ton of work. The best candidate is the one on Mercer Island because it is well located near the library and high school, right in the center of the island. However, even at $649K it’s still really overpriced. The simple formula I use for determining a reasonable price for a fixer goes like this. Take the average sale price (not asking price) of a couple of totally renovated comparables in the neighborhood that have recently sold. That’s are your benchmark. Subtract the cost of totally renovating your fixer – let’s say $300K. Subtract the margin you want to get – let’s say $100K. That leaves you with the maximum price to pay for your house. In this case, you can see that adding the $400K to a purchase price of $649K will require you to sell the renovated house for $1,050K – a price you are unlikely to get in this market. If this 60’s style split level house were completely renovated right now, the sellers would be lucky to get $850K, and even that price might be a challenge given the glut of unsold houses. My two cents.

By: Frank Schulte-Ladbeck

Frank Schulte-Ladbeck — Wed, 16 Jul 2008 09:45:32 +0000

Your article has given me a smile. I like your approach in this article. The one nice thing is that the developments of new materials have improved the time between some repairs.They now have 90 year drive ways instead of the 50 year slab concrete ones, and Hardie plank can make the exterior last longer. Who knows, maybe we will start building a house that will last a lifetime? But then we will not have handyman specials.