Saturday, June 26, 2010

The Shiny

Real life observation: women who go to the gym in a full face of makeup with their hair done just so. . . . they crack me up.

This has nothing at all to do with real estate.

Or. . . does it?

Many of the buyers we've worked with in the past 2 years or so are shopping in the lower price ranges. Single family homes with 3 bedrooms and 1 or 2 baths. Price range is about $70,000 to $100,000.

Inevitably the selection of houses we see includes something just like the two homes below.

Home Number One

The Realtor’s description reads like this -

A/C replaced 2 years ago, new roof in 2009 with transferable warranty, water heater only 5 years old. Exterior painted last month. Seller will buy 2-year home warranty. This home has been well cared for by original owner. Price reduced to $105,000!

This house has pictures like these:

the shiny, old KIT

the shiny, old BA

. . . and it looks like this from the front:

the shiny, old ext, good curb appeal


Then there’s the other option. . .

Home Number Two

Inside, it looks like this:

the shiny, new KIT

the shiny, new BA

But it looks like this on the outside:

the shiny, shiny house bad EF

. . . and the Realtor description on this house says something like this:
Complete remodel! Travertine floors, maple cabinets, stainless steel appliances. New carpet, new paint. Seller will not issue Disclosure Statement about condition or provide CLUE insurance history. Ready to move in at $97,900.

Home number one has all the fundamentals dealt with. The big-ticket, expensive items to replace have all been replaced. The cosmetics are, well, to be kind: dated.

Home number two is an obvious investor fix and flip. The investor just completed a total overhaul of the house but refuses to provide a disclosure statement listing what he or she knows about it. Nice! Plus, that chain link fence in the front makes me reach for the eye bleach. I guess the seller’s message here is “we don’t really like our neighbors much” ?

It’s the curse of The Shiny

Guess which house the majority of buyers make an offer on? Home number 2.

Buyers get stars in their eyes over the fancy, shiny interior remodel and forget that they’re buying a home they know nothing about that could possibly need a roof, A/C unit and water heater in the first couple years of ownership. Plus miscellaneous plumbing &/or electrical problems as yet unknown, because even the best home inspection can’t possibly uncover everything.

Sure, the interior cosmetics of home number 1 are dated. It looks like the Brady Bunch just moved out. I get that. I do, I really do. I don’t want to live in the Brady house anymore than my buyers do.

I just can’t help feeling that I’m not really doing my job 100% when I can’t convince the average buyer to consider for more than a few fleeting moments the incalculable value of a house with the big-ticket stuff already paid for. Even if it’s an extra $7,000 in purchase price and has 15 year old cabinets and counters… The value of having a new roof, A/C and water heater are nearly priceless to cash-strapped first time homebuyers.

Too many home buyers act like the star-struck middle-aged men at the gym: so blinded by The Shiny of a middle-aged woman in Kabuki makeup and a fancy hairstyle they can’t focus on anything else. Not even their own good.

edited to add links below

What is a Seller's Disclosure Statement?

What is a CLUE insurance report? (scroll down a bit in the article linked here, to about 1/3 of the way through the article)