First-time homebuyers can be challenging clients, as they’ve perhaps been engrossed in “DIY” TV shows or are otherwise under the impression that a rehab project is the way to go for their first home.
I once had a nice young couple who was purchasing their first home. They weren’t married yet, and the young gentleman was a carpenter’s apprentice. Of course, the soon-to-be-bride was beaming with pride that her fiance could fix just about anything!
The first home we looked at needed extensive work. Upon arriving at the property, and before we even went in, she announced that they wanted it! Needless to say, her fiance looked a little ill when we exited and he said even he “wasn’t that good!”
Advising your first-time homebuyers is crucial to not only a successful sale but also a happy client who will come to you for all their future real estate transactions.
Purchasing a “money pit” unawares will not only put their financial stability in jeopardy, but may leave them with the impression that you did not advise them properly!
Here are five tips you should consider beforehand:
- How are you paying for this home? If your buyers are getting a mortgage for their new purchase, make sure the loan fits the product. There are only a few lending products that will allow for a rehab project, and even less that will allow them to do the work themselves. Ascertain their financial situation before even showing them properties. A “fixer” may not even be within their capabilities. If a family member is helping them with the cash, make sure the buyer is including the “money man” on the tours and in the decision.
- Get past the ugly! Have your buyers make a list at each home what they would want changed, what must be updated and what they believe the lender will require. Remind them that “ugly” doesn’t mean obsolete. Many homes owned by senior citizens may need a lot of updates, but in many cases the “bones” are in great shape, such as the heating system, roof, electrical and plumbing. Perhaps their tastes are decades behind the curve or they’ve just been more concerned with mechanicals than aesthetics.
- Rehab vs. cosmetic updates! There’s a difference between rehab and ugly, updates versus delayed maintenance. Painting, flooring or a few windows here and there can prove to be relatively easy and inexpensive rather than replacing a furnace, shoring up a bad floor or moving walls. Things like running new plumbing, updating from fuses to breakers in the electric box or changing a bedroom to a first floor laundry is not within most buyer’s scope of expertise.
- Level of tolerance? And how about those buyers who want a “fixer” but cringe at anything more than handling a paint bucket? Get an idea as to their level of tolerance and talents. I try to impart to my buyers the task before them, with eyes wide open!
- Get a professional! Certainly encourage them to have a general contractor waiting in the wings to do a comprehensive analysis on what the home needs before making an offer.
A true rehab project can take years to complete! Drywall dust can permeate every nook and cranny for months, and the table saw could be in the dining room for weeks at a time.
That’s not to mention the continual trips to the local DIY store during the process and the costs involved.
It is your job as their agent to ask them to think about the task at hand, the commitment required and the personal stress and continued financial costs their “dream home” may require. It’s not for the faint of heart.
But for those brave enough to take it on, it can be a rewarding experience with hopefully a lot of laughter and memories made along the way!
Beth Campbell is the Broker/Owner of Another Listing, LLC in Stark County, Ohio, founded in 2009, which has grown to 18 agents. Beth’s personal expertise is in rural and small acreage properties. She lives on a mini-farm with her husband, horses, cats and ducks.