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Location: Danbury CT covering all of Fairfield County
2,636 posts, read 7,433,232 times
Reputation: 1378
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I have a client that will be listing their condo as soon as possible. They purchased the property at the top of the market with another agent in 2007 as a fixer upper. They have done some improvements to the property (new furnace, central air, hot water heater, oven) but there are a number of cosmetic issues with their home. The property's value has declined over 30% since their purchase. Staying at the property is not an option.
They do have a good amount of equity in the property but are cash poorer. After I first met with them, based on the homes condition, I would feel comfortable listing their property in the AS-IS condition, as any offer a buyer would make would be considerly below market value . They want to sell quickly to move on. With their permission, I brought a handyman over for an estimate to fix the things that the homeowner and I felt need to be done prior to listing, not the things that I would consider improvement. The items were a lot of small things (repainting 2 ceilings, install a new bathroom floor over where plywood is, install and rehang a couple new interior doors, fix a leaking kitchen faucet,etc) which totaled to be about $1300. The homeowner felt it is a very good price, but is working on another estimate from someone they met.It will take about a week to do.That price does not include 1 thing I think we are going to offer a credit out for (replacing a broken window pane and perhaps removing really bad falling down wallpaper in a room). The repairs that have to done would bring the value back up about $3500, in a buyers opinion. I expect the property to sell to a first time homeowner who does not want to do too much work.
They will be have 4 rooms with carpets professionally cleaned once the work is completed.Their home will be priced to sell quickly. However, the handyman is requesting $500 to start the job and is OK being paid the balance at closing. The seller can not find $500 to start the repairs. They did ask me for the $ to start the job, and then they pay me back at closing. I politely declined, as I am not a bank, and I have bills to pay just like everybody. They will somehow find a way to get it done. I feel bad for them, it is not my to fund their home repairs. If they were your clients, would you offer to loan them the $?
a lot of variables undisclosed here.. what would be the projected sales price of the home? do these buyers intend to buy another home from you after this one sells?
me personally, if I knew the sellers well enough, I'd have no problem fronting the $500 with a contract notice written up that you are to be reimbursed on the HUD. if the home does not go to closing for whatever reason, the seller is obligated to pay you. I'm no lawyer, so I'm not sure how that would be written, so a local lawyer of your clients choice (and your acceptance) would be in order.
in addition, any repairs/remodels that won't dissuade a potential buyer from moving forward could be pubished that said item repairs will come upon a ratified contract, and most importantly, after a release of all buyers contingencies.
My initial thought is, yikes the poor handyman. He's about to do $1300 worth of work and can't even get $500 to buy materials to get started. How is the owner going to pay him the balance if he can't even come up with $500 at this time?
Location: Danbury CT covering all of Fairfield County
2,636 posts, read 7,433,232 times
Reputation: 1378
Price is around $190,000, which is on the lower end of prices the area. The sellers intend to rent in a different part of town, once they can, and they want to be find them a rental. I don't really know the seller, was refered to be an acquittance of mine. Total cost to fix is $1300 ($350 for materials, rest of bill is their time). $500 to start, and handyman would get the balance at closing.
The place won't be too bad once the work I suggested is done. It's a condo built in the mid 1970s. Bath fixtures are dated but functinal, kithen cabinets aren't bad but dated, the kitchen counters are neutral but old (I won't replace them with the old cabinets). Floor in the kitchen is OK, so is entry. Fairly new carpet in bedrooms, living room and laminate in dining room. Lighting is dated but functional.
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