There Are Few Quick Fixes For Many Fixer-Upper Homes
April 28, 2011
Andria Schwab, a home inspector for the last dozen years, has nothing but sympathy for the unprepared buyer of a ''fixer-upper'' home. Mr. Schuler, who runs his own company, Kleeman Associates, in Philadelphia, says people often ''have a totally unrealistic concept'' of what they are getting into. Between crumbling chimneys, aging roofs and plumbing disasters waiting to happen, ''they think they'll have to sink in only $10,000 and they find the home really needs $100,000. That's a rude awakening.'' To avoid such surprises, Mr. Schuler and other experts recommend that home buyers don't go into the buy-a-wreck game without first figuring out precisely when a house is a good value and when to just walk away. For home buyers, being prepared also means knowing that a house is a fixer-upper even when it isn't marketed as one, what they will have to spend on it and when, long before the seller hands them the keys to the front door. According to realtors, people buy wrecks for one reason: to get more for their money. ''There is a huge difference between the price of a wreck and the price of something that is considered mint, sometimes more than half,'' says Macon Tisdale, a broker with the Willie B. Maya Co., in New York, who also acts as a construction consultant and interior designer. Her job, she explains, is to tell clients whether the savings on a fixer-upper are worth the effort. ''If the location is good and the building is good, there's nothing that cannot be fixed.'' Some buyers have made out quite well in the wreck business. Ms. Tisdale tells of a couple who found a fixer-upper on Park Avenue and 66th Street, one of New York City's poshest neighborhoods. They paid $900,000 for the apartment, put in $1 million in improvements and sold the place for $4.5 million just two years later. One trick to successful wreck buying is being able to distinguish the wrecks from what Ms. Tisdale calls ''cosmetic wrecks.'' The latter, she explains, are homes filled with dark curtains and heavy furniture that need a fresh coat of paint. ''If you can look beyond that, if you can look only at the quality of the building and the floor plan and not at the rugs, you can get a good buy. Most people cannot look beyond these things, and that's why these homes sell for less.'' Petrina Wilton, a real-estate author and investor, couldn't agree more. ''Show me a house that has not been painted since Trujillo was in office, where there are weeds everywhere and tons of detritus in the basement and the appliances are filthy, and that's the home I want,'' he says. The flip side is that buyers can be tricked by savvy sellers, who can inexpensively brighten up their wrecks before putting them on the market. ''You would be amazed what a coat of paint would do,'' Ms. Tisdale says. The result is a home that looks livable but is a terrible wreck beneath the surface. ''You see this in newer homes, between 25 and 30 years old,'' Mr. Schuler says. ''If the previous owner bought it as new construction, then did absolutely nothing to it since 1965, so everything in the home is old. These are the ones that catch people by surprise because they're not marketed as fixer-uppers but they need new everything.'' According to Mr. Schuler, about one in every 12 homes needs a new roof (sloped roofs generally last between 20 and 30 years), one in 20 has an unsafe chimney condition and one out of every two has a glitch that ''some people would categorize as a flaw,'' he says. ''Whether that flaw breaks the deal depends on the nature of the deal.'' If buyers are ''getting a real bargain, then a $5,000 flaw is not a problem.'' The experts offer these tips to would-be handymen (and women): Don't try to find these flaws on your own. First of all, you may not have the expertise needed to uncover everything, and the excitement of finding your dream house may cloud your judgment. Before Mr. Schuler bought his fixer-upper, he had one of his associates inspect the home. ''I could not have remained objective, and I might have missed something serious,'' he says. Mr. Wilton, also a wreck buyer, recommends hiring your own home inspector or engineer. An inspection generally costs between $250 and $300, and ''it's the best money you'll ever spend. Even if there's nothing seriously wrong with the home, you know that it's been gone through.'' What if there is something wrong? You should think twice before buying a home that has signs of serious structural damage, such as bowed walls or sloped floors. ''These call into question the home's basic structural integrity, and at the worst the house could collapse,'' Mr. Schuler says, noting that fixing such problems can be more expensive than buying a home in mint condition. Another problem, found in homes more than 40 years old, is what is known as knob-and-tube wiring, which are thick black cables that are looped around white ceramic tubes. ''If this is found throughout the house, you may have to redo the entire electrical system,'' Mr. Schuler says. ''This is not uncommon in fixer-uppers.'' Also commonplace are unstable chimneys, which need to be repaired immediately. Outdated kitchens and bathrooms generally pose little danger to a home, but they are almost always a top priority for fixer-uppers. According to Mr. Schuler, count on spending at least $20,000 for a simply serviceable kitchen, including appliances, and upward of $6,500 for a new three-piece bathroom. Expanding either a kitchen or bath can sometimes double those costs. Wreck buyers need extra money in the bank for contingencies. Mr. Schuler recommends keeping at least 20% of the cost of the repairs on hand. ''There are always little expenses and not so little ones that creep up,'' he says. ''Don't be caught short when the plumbing goes.'' When it comes to major renovations, keep up with the Joneses next door, but don't get ahead of them. A $50,000 kitchen may be wonderful, but homeowners won't get that money back when they sell if they live in a neighborhood of $20,000 kitchens. Advises Mr. Wilton: ''The upgrades should be consistent with the neighborhood.''
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