Shearin-Hathaway Group: Top 10 Tips for Buying a Real Estate Wreck

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Top 10 Tips for Buying a Real Estate Wreck
Shearin-Hathaway Group
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Shearin-Hathaway Group
MANHATTAN A handymans dream. An architects
delight. Needs some TLC these are some of the
real estate euphemisms that let you know a home
will need a serious renovation.   Roughly 10
percent of prospective buyers would consider a
home that needs major remodeling, according to
Doug Perlson, co-founder and CEO of
RealDirect.com, an online brokerage that employs
a search tool for wrecks. As home prices
increase and as competition increases, the idea
of a 'fixer' becomes almost a necessity for some
people because the buyer pool shrinks pretty
dramatically for those who want to do the work,"
Perlson said.  
The listing for this two-family brownstone at
795 Lincoln Place in Crown Heights says, "Perfect
For Someone Who Is Willing To Do The Work."
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Shearin-Hathaway Group
1. A fixer-upper isnt necessarily a bargain As
with any type of housing in this tight market,
there may be bidding wars. Sharon Cohen, of
Keller Williams NYC, said that within one week of
listing a 1.05 million two-family brownstone at
795 Lincoln Place in Crown Heights in need of a
total rehabilitation, nearly 100 people inquired
about the property and that was during the slow
time of the holidays. 2. Find a contractor you
trust   Besides getting references from
homeowners who have done similar types of
projects, go and see projects the contractor is
doing, Schleider suggested. Don't just go with
cheapest. A lot of contractors bait with a low
estimate and then charge for other stuff.
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Shearin-Hathaway Group
3. Tour the property with a contractor before you
buy   Though bidding wars might put a time crunch
on decision-making, its still essential to walk
through a home with a contractor before signing
on the dotted line, said Fraser Patterson, a
former contractor who is CEO of Bolster, which
offers insurance on remodeling projects.   "The
contractor will see details and notice potential
problems that you wont see, Patterson said,
adding that it's also an opportunity to "see if
you gel" with a contractor.
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Shearin-Hathaway Group
4. Know a buildings rules   If youre buying an
apartment, townhouse or anything in a landmarked
district there are often rules regarding what you
can or cant do.   A condo or co-op board may
put the kibosh on breaking through a wall that
holds a freestanding heating or AC unit or adding
a washer/dryer, Patterson said. And for many of
them, dont even think about putting in a second
bathroom.
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Shearin-Hathaway Group
5. Make sure you have the right team   To
properly approach a fixer-upper, you'll need to
have a lawyer, an architect/engineer who will
sign off on plans and an expeditor someone who
understands the Department of Buildings' rules
and codes, Kirkpatrick said.   A good expeditor
can cost between 5,000 to 10,000, Kirkpatrick
noted. Sometimes people try to cut corners by
skipping out on expeditors, he added, but that
can pose later problems. 6. Know your
townhouse's history If you're converting the use
of a townhouse from a multi-family building to a
single-family home, or vice versa, you will need
a new Certificate of Occupancy from the Buildings
Department, Kirkpatrick said.  
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Shearin-Hathaway Group
7. Understand your projects timeline It will be
a long haul   With a massive renovation project,
you may not be able to move in until all the work
is finished, Patterson said.   If youre
planning a remodel that will change essential
components of the home like structural,
plumbing or electrical remember that youll
need a go-ahead from the Department of Buildings
before you start, which will require hiring an
architect to create plans and submitting them for
approval, he said. 8. Understand your personal
timeline Is it your forever" home?   What are
you trying to get out of it? Is it a five-year
plan? asked Perlson, who cautioned against
taking on a pricey endeavor if the digs are
somewhat temporary.
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Shearin-Hathaway Group
9. Have a realistic budget   More likely than
not, remodeling a home will cost more in the end
than you budgeted for, Patterson said.   If you
didnt have the luxury of time to plan during the
buying process, then factor in another 10 percent
to the property's total cost, he suggested.
And because there may be unforeseen hidden
costs, he advised on insuring the renovations
project.   If the added costs arent something
youre willing to take on right now, consider
moving on to a turnkey property, or one that
requires less work, he said.
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Shearin-Hathaway Group
10. If you dont have a vision, it may not be the
right opportunity   It helps to have a clear
vision from the get-go, Schleider advised, down
to the spots on the wall for electrical
outlets.   When developing a work plan, instead
of saying, for example, renovate the bathroom,
outline the specific model number of the toilet
and sink and find the stores that sell the tiles
you want, he explained.   The more specific you
can be in terms of finishes, the more OCD you can
get on a spread sheet and on labeling, the better
the process will go, he said.
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