Real Estate Agent Chooses Remodeling Over Buying a Turn-Key Home Every Time – Part 1
I will be writing a series of blogs on what I’ve learned and what my family and I have experienced over the years in buying and remodeling our homes.
Let me start out by saying that I have never, and I repeat never, purchased a home that was designed the way I wanted it to be appointed (in other words a “turn-key” home). I have remodeled every home I’ve ever owned—even before I became a Real Estate Agent in the Silicon Valley. Why? Because of a few factors: 1) money, 2) appreciation, and 3) taste.
Money
Budget is always a factor when purchasing and, in my case, ultimately remodeling. There are some homes that are tastefully done and usually appeal to the masses. I call these “toothbrush and pillow ready” homes. The segment of the market that wants to walk into their new home with a toothbrush and pillow and set-up camp the day after the close of escrow represents approximately 85%-90% of the buyers out there. This means that only 10%-15% can see the “potential” in a home. The decision to remodel over buying turnkey quickly became an easy question relating to economics: Did I want to compete against 90% of the other buyers out there, or would I better my odds in the 10% of the market? It’s always been an easy answer for me. As long as you are willing to invest the time and money into getting what you want, you too will be able to get it, and ultimately less! If you have money to burn, well then that’s a different story. Quit reading this blog and call me now: 650-701-7822! 🙂
Appreciation
I cannot speak for other markets (although presenting around the country at Real Estate conventions has somewhat exposed me to what is going on around the USA), we in the Silicon Valley have been fortunate to see our [more than] fair share of appreciation. Why is appreciation a big deal when contemplating a purchase followed by a remodel? It’s simple—you don’t want to be the most expensive house in the neighborhood otherwise your appreciation will lag behind that of your neighbors. Let’s talk numbers. If everyone else’s house in the neighborhood is approx. 2000 sq. ft., it is typically not a great plan to want to do an addition so that your total square footage is 4000 sq. ft. Your ego may soar, but you will be overbuilt for the neighborhood so get over it!
When we bought our current home, the main footprint was 1,028 sq. ft. (no, not my ideal by any stretch of the imagination). The previous owners had an attic conversion done upstairs, but never took the construction all the way through the permitting process approximately 25 years ago. Essentially, we already had almost 1,900 sq. ft. built, and our recent addition (which will have before/after photos in future blogs) brought our footprint to almost 2,200 sq. ft. What do you think that did for our home value in terms of appreciation? I’ll tell you—it allowed us to take out a HELOC (Home Equity Line of Credit) on our home after only one year of owning so that we could complete a pretty large edition (of a family room) and remodel two bathrooms and other areas of the house. Appreciation is huge in the Real Estate game, and if you can be in the 10%-15% of the buyer population in terms of opening up your mind and home shopping list, you can find these opportunities too!
Taste
Everyone has different styles that they like, and I am certainly not going to profess that my taste will be one that appeals to everyone else. The design of and the way your home will be appointed is a very personal choice. It is, however, safe to assume that we’ve all seen some rather “interesting” selections that homeowners have made in remodeling. Because I get to see so many homes every year, I am probably pretty close to “seeing it all” in this area of my business. I do love a good surprise though!
For fun, I’d like to show you a couple of ways that paint can either be extremely costly or can simply be an easy “fix” (unlike some of the buyers on any of the HGTV’s shows would like to think). The first photo is of a bathroom with some fairly high-end features. The color is, however, horrendous to most people. This is an example of an “easy painting fix” at an approximate cost of between $400-$600. I’m estimating higher because any professional painter would have to prime the walls and coat them several times to ensure the purple would not show through.
This next photo portrays a whimsical kitchen with some great choices. The obvious “remodeling foul” for most people here would be the intermixed pink and white cabinetry and the pink window sills. Again, this choice is whimsical and fun for the current owners, but don’t you feel there should be a cotton candy machine stashed in the corner of this kitchen? This is an example of an expensive paint fix. Our friends at DJS Painting are great at Decorative Painting, but it is an expensive process and in some cases, it might be most cost-effective to rip out the cabinets and start over. Either way, it’s an expensive fix. Would you pay top dollar for this house, or would you feel that your offer price should be lower because you’d have to do expensive work because this kitchen may not be your taste?
Now you know why I, as a Real Estate Agent, prefer purchasing a home that needs some remodeling over a turn-key home every time. Everyone has different comfort levels and abilities to oversee a remodeling project as well as varying budgets. It’s why I surround myself with a great team to help me. More on that later as I’ll share some of my team members with you. I do have an advantage, and that is that I know the Silicon Valley Real Estate Market and home values, but I am happy to help you.
Before I go, here is a photo of our home when we first purchased it. You wouldn’t recognize it now! Check back and you’ll be able to see our remodeling process.
If you need a recommendation on an architect, general contractor, electrician, etc. prior to future posts coming out, just contact me and I’ll make an introduction for you. Until next time!
Cheers,
Dawn Thomas
