4 Lessons We Learned from Buying Our House at an Estate Sale

4 Lessons We Learned from Buying Our House at an Estate Sale

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Newlyweds Laura and Chris Mericas, pictured above, stumbled upon their dream home at an estate sale in Houston, Texas. “We were never wanting to buy a brand new house,� Laura told MagnifyMoney. “We knew that whatever house we got, we would want to do work.� Photo courtesy of Laura and Chris Mericas.

Around a year ago, newlyweds Laura and Chris Mericas were eager to purchase their first home in Houston, Texas. It didn’t take long before they realized homes in the neighborhoods they liked were out of their budget, so they put home buying on hold. Laura and Chris aren’t alone — like other millennials, they’re being priced out of markets across the country. Homeownership among millennials is lower than decades past: For those under 35, 39% owned homes in 1995, compared to 43% in 2005 and just 31% in 2015, according to the U.S. Census Bureau.

On the off chance that he might come across a good deal, Chris, 26, continued to look at realtor websites. A year later, he happened upon a home in the Garden Oaks-Oak Forest neighborhood in Northwest Houston that piqued his interest. The property — a three-bedroom, one-bathroom fixer-upper — was listed as part of an estate sale, and it was within their maximum budget of $350,000. They made their move.

“We found the house on a Monday and had an offer accepted by Friday,� Chris says.

But the journey was far from smooth. Here’s what they learned along the way.

You can’t judge a house by its cover photo

Browsing through realtor photos of the house online, Laura wasn’t exactly impressed. Driven by the price point, however, they decided to give it a shot.

They were pleasantly surprised.

“Because it was an estate sale and because the people selling it weren’t super motivated [to stage the home for photos],� says Laura, 25. “For whatever reason, the pictures online were awful.�

The home had belonged to a man who was born in the house and purchased it after his parents died. He had rented the home out and planned on permanently moving into the house before he passed away. It was his children who decided to sell rather than continue renting it out.

Laura says she thinks because the home was a rental property, the children were even more eager to sell it. Brian Davis, a real estate investor, says family members eager to sell estate sale properties is common.

“The adult children typically want to sell the property as quickly as possible, since it will continue to accrue costs while it sits vacant,� he says. “Mortgage payments, taxes, insurance and maintenance all add up quickly. These adult children often don’t have as strong of an emotional attachment to the house as live-in owners do, and are less likely to be offended by low offers.�

Emotions will inevitably add complications

Despite the children not being attached to the home, Laura, a freelance journalist, and Chris, a mechanical engineer, still felt unsure how to act during negotiations.

“I think the fact that it was an estate sale made it different on our end,� Chris says. “In the negotiation phase, we were a little conflicted. We don’t want to belittle the fact that they just lost their father … but in addition to that, we wanted to play off the fact that they weren’t selling this house to buy another house. It was extra income that they weren’t expecting because their father died at a young age.�

There were other offers on the table, but most were from professional house flippers who were offering land value only, so theirs was accepted quickly.

A good home inspection is everything

Laura and Chris first found their new home in early March, and they closed on April 24. All in all, the whole process took around 50 days.

“It was a pretty stressful two weeks at the beginning, getting all of our paperwork and getting all of our employment records to get the loan,� Laura says. They both had strong credit scores and were already pre-approved for a mortgage because they had looked into buying a home a year earlier, which helped speed up the process.

But it wasn’t all smooth sailing.

“We had to scramble to get the inspection done,� Laura says. The couple initially asked for 10 days to get the appraisal done, but then asked for a two-day extension because a lot of inspection companies were closed for spring break.

After their initial offer was accepted, inspectors came to look at the home and found it was rife with problems: outdated and dangerous electrical wiring, plumbing troubles, and holes in the sewer line. The inspectors said it would cost around $20,000 for these repairs, so Laura and Chris sent a second offer that took these costs into consideration.

Their offer was accepted immediately.

Fixer-uppers require a lot of imagination — and cash

In most home sales, the property is tidy and beautifully staged. Laura and Chris discovered this wasn’t the case in their estate sale. “I feel like when people are trying to sell their house, they might try to spruce it up a bit in the months leading up to it,� Laura says. “There was definitely none of that. It was dirty. There was dog hair.�

So they used their imagination. Laura and Chris always envisioned purchasing a home in need of renovation and a little TLC, so the problems with the house didn’t faze them. “We were never wanting to buy a brand new house,� Laura says. “We knew that whatever house we got, we would want to do work.�

After completing around $20,000 in necessary home renovations after closing, Laura and Chris moved in early June. Although it’s been a whirlwind few months, the couple feels lucky to have swooped in on the estate sale at the perfect moment. They say every other comparable home they saw in the same neighborhood about $75,000 more than what they paid.

“We saw an opportunity to get into the neighborhood with a steal,� Laura says. “Down the street, there are people building enormous houses. We would never be able to get into this neighborhood at that price ever again.�

Tips for purchasing a home from an estate sale

Kevin Godfrey, an agent with Douglas Elliman and the owner of Henry Laurent Estate Sales, shares his advice for purchasing a home through an estate sale.

  1. Use the estate sale as the open house. Go into the rooms, check the water pressure, inspect the foundation, and discreetly take measurements. Take your time and make sure it’s what you are looking for. A standard open house lasts for two hours, while an estate sale lasts for two days — eight hours each.
  1. If you get in early enough, the owner won’t have an agent yet. Dealing directly with them and only using real estate attorneys to finalize the transaction can save the owner the typical 4% to 6% agent fee.
  1. As with any purchase of a home, you’ll still want to do all of the necessary inspections and search the property records for liens or encumbrances.

The post 4 Lessons We Learned from Buying Our House at an Estate Sale appeared first on MagnifyMoney.



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