We are all watching HGTV. They make it look easy to take an old, run down house and turn it in to a shiny, new, renovated home most any buyer would love to purchase at a premium price.

This year, we’ve helped buy and sell several “fixer-uppers”. Here’s what we’ve found:

• it’s not as easy as it looks. There are more buyers (including investors) than sellers in todays market. You have to be creative in finding homes that are distressed and in need of repair. You must be diligent in searching the MLS listings, create relationships with REO agents, and possibly spend time on the court-house steps in order to find the right property. You will see many houses that are overpriced and will not make a profit for you in in the long run.

• Take your projected costs and add another 10%. You should be able to project your costs on your initial visit. How much is a basic kitchen re-do? How much is a high end kitchen? Do you need to paint the entire house? What does the roof look like? Are there signs of water stains (leaks) or termite damage? Meticulously go through the home from top to bottom in order to assess the repair costs. One home recently looked fine outside until we went to one side of the house. The siding was rotting underneath the fresh coat of paint (hiding this?). New hardi-plank siding was needed on the entire exterior. That could have been an additional $20,000 in costs we may not have anticipated. Any profits could be wiped out if you make a mistake in your projected costs.

• Look ahead at potential market conditions and if you are headed to a down cycle. What does a home sell for at the renovated cost in this neighborhood? Is it possible to “over” renovate a home? If most homes are selling in the high $200’s and you renovate where you need to sell in the mid $300’s… You will not recoup the investment. You may even lose money on the deal. Make sure you are looking at equivalent comps in order to make the best decisions on how to renovate. Time of year is important as well. Time is money and if you are listing after school starts, it may (or may not) take longer to sell the house.

• It’s not just “lipstick on a pig”. Buyers and their agents are savvy. They are going to be “wowed” buy the new flooring, paint, appliances, tile, etc. That does not mean you can leave an un-serviced 25 year old HVAC and no one will notice. They will see water leaks in the attic, they will question any “rodent” droppings or traps, and painted cabinets sometimes add charm, but other times they look old & out of place in a newly refurbished home. Make the home “pop”, but don’t neglect the systems.

• Your construction costs can make or break you. Are you getting the best deal from your suppliers? It pays ten fold to shop around. Look for the best prices on appliances, lumber, paint, etc. The more time you spend on cutting this cost, the better you will be on your bottom line number.

• What happens if you run into unexpected set backs? The porch seemed fine when you bought the house. Now you notice it’s leaning a little too much on one side. Do you have a structural problem? Do you need to hire an engineer to help you determine the cost of repair? You may sell a home “as is”, however your agent is required to disclose any major defects the home could possibly have.

• You’re under contract? Congrats! Now it must appraise. You’ve bought at a good price, you were mindful of your expenses during the renovation, and now you are under contract at a high price! If your buyer is getting a loan, the lender will require an appraisal. Make sure the comps are close to your list price. Be ready to show your renovation costs as well if you need to justify list price as well. Appraisers are very conservative in today’s market. Make sure you can back your price in order to get to the closing table.

• More possible expenses will crop up with the buyers inspection. You’ve done a great job and the renovation is a success! Your buyer will most likely hire a professional inspector to look over the house. There is no “perfect” home. They will come back with some repair requests or ask for a concession on the contract price. Keep this in mind and realize they will be looking specifically at electrical, the roof, the heating and cooling systems, and for signs of structural issues.

• More costs…. Do you get a survey or termite bond? We will usually have our pest control person look over the home during our very short due diligence prior to purchasing. Most of these homes are sold initially “as is”. You may be able to request the seller pay for a termite bond if there are signs of termites. If not, you will know up front there is an added cost of getting rid of termites and treating the infected areas before you list. Surveys are not always ordered when buying a house. In my opinion, if the current seller does not have a survey, you should add that as an expense to your reno cost. Having a survey not only gives you peace of mind on the property lines, it also shows a potential buyer that you’ve gone above and beyond in confirming the property lines for their new home.

• This is our formula on deciding how much to offer a potential flip. Everyone has his or her own way of looking at how to cost out a reno. We take the potential lowest contract price after the renovation, deduct the realtor fees, deduct the cost to renovate, and subtract our desired profit.  This gives us our offer price on a distressed property. Hopefully that is a number the seller will accept and we can start the flip!

• Oh yes- you’ll need cash and the ability to close in 10-14 days in order to be competitive on a good flip. There is so much competition for distressed homes, you need to stand out to a seller. Cash, a short due diligence (0-5 days), excess earnest money, confirm home is sold ‘as is”, and a quick close (no more than 14 days) will give you a leg up on the competition for the home.

Good luck! Call me if I can help!

Jill Rice- Atlanta Realtor®-

770.330.7477

jill.rice@me.com

Atlanta :: Gwinnett :: Sandy Springs :: Brookhaven :: Tucker :: Lake Lanier :: Norcross :: Peachtree Corners :: Cumming :: Roswell :: Suwanee :: Johns Creek :: Alpharetta :: Buford :: Dunwoody

The post Are you Flipping Crazy? Let’s flip a house together! first appeared on Jill Rice.

Here are a few tips to get you ready for a hot market and make sure your home is considered the “shiny penny”!

Have you ever wondered why one house on a street sells in a few days, while another home with a similar floor plan takes weeks or months? We call it the “shiny penny” rule. Think of it this way, if you have 2 pennies, they are worth exactly the same: 1 cent….. However, wouldn’t you rather have that pretty shiny penny over the dull, dirty penny? That’s what potential buyers subconsciously are doing with your home. You may have a great house with even an edge in features, size or location, but if the house down the street is a shiny penny, it may just sell first.

Here are some tips to make your home the shiny penny of your neighborhood:

1- De clutter- prior to listing, take each room and put 3 boxes in the room. 1 box is for the trash, 1 box is for a thrift shop or consignment, and the last box is for your “future” house and temporary storage.

Examples of what you put in the boxes: excessive family photos, books, knick knacks, clothing from the season you are not wearing now, and anything that does not bring you joy or is not useful (check out the book “The Life Changing Magic of Tidying Up” for more on this topic)

2-Touch up- Are there scuffs on the walls? Do you have marks on the floor? Are there stains on the carpet? Consider painting the walls & trim, refinishing the floor, professionally clean or replace the carpet in order to help make your home “move in ready”. Do you have interesting paint colors? Are they outdated or outrageous? Paint in a neutral color that will appeal to your potential buyer.

3- Clean, clean, & clean again. Hire a professional. You’ll want the kitchen and baths spotless. Get rid of any mold in the grout in the tile. Make sure there is no dust on the ceiling fan. Remove 1/3 of the items in your pantry and closets. You want this space to look huge. Fewer items will make it seem larger.

4- Curb appeal is very important. Trim shrubs if they are blocking windows or the porch. Throw out some grass seed or fertilize your yard. Pine straw will work wonders on a not so shapely yard or garden bed. Remove weeds & blow leaves. You want your yard to look as if it takes no effort to keep it looking beautiful. You’ll also want to repair any wood rot on windows or door trim. Does the outside of your home need painting? Perhaps only the trim needs some attention? A freshly stained deck can look brand new versus the same deck with a 4 year old stain. Stand at the end of your driveway and be critical. There are small items you can do now to make your home a show-stopper from the curb.

5- Does each space inside and outside have a purpose? Add pillows to a window seat, create a small office or sitting area in a current space crammed with “stuff”. Create a gathering place outside on the deck or in the yard. If your home feels inviting, a potential buyer will also feel at home and comfortable in this space. As soon as they start picturing their items in your home, you’ll be one step closer to a full price contract!

Knowing what to do is difficult. Removing items you’ve had in your personal space for years is not an easy task to take on. Let us help you make these decisions. We know what buyers are looking for in a home and can point you in the right direction!

Call or email us for a consultation today!

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The post Ready to sell your home? first appeared on Jill Rice.