When is too small a signal to run away?

Today, the second part of Shadow’s question: How does a buyer figure out which problems common in “compromise” houses are fixable and which should signal the call “run away!”

Shadow asked: How can buyers in a price bracket (say $50k wide) maximize their housing purchase - are there solutions to problems that are common in homes in that price range? Low ceilings, small bedrooms, cramped bathrooms, etc?

Ceilings

Very high ceilings are expensive to heat. Although people like the sense of space that a cathedral ceiling creates, they pay for it with their heating dollars. Most of my clients still like them. Then there is a “normal” ceiling height that is somewhere around seven feet to eight feet. Most people are comfortable with that. As soon as ceiling height falls below six-and-a-half feet, people start to feel cramped. I consider that a “run away” quality.

I once had a client who really liked a house for sale that had six-foot ceilings. I did everything I could to talk him out of it. His rationale was that he was short and so was his girlfriend. I reminded him that all his friends were not so short. I did my best… His parents talked him out of it and I was relieved. I think a house with abnormally short ceilings will always have a drag on resale. Short basement ceilings have a similar negative, but not as much. If the ceiling is not a bit over six feet down there, most people will not use the basement much. This affects resale.

Then there are ceilings that were lowered by “dropped ceilings.” Beware of them. Most were done for energy savings in the 1970s. But, since then that space may have been used by electricians and plumbers. You may find that it will cost thousands to rewire and replumb the wires and pipes that now lurk above.

Ugly ceilings are in the eye of the beholder. Some people cannot abide shiny/sparkly patterns on plaster ceiling. The solution for these is either a plaster skim-coat or a new layer of sheet-rock over the existing plaster. For “popcorn” ceilings, you need to sheet rock. (Also, some popcorn ceilings had asbestos and should not be scraped.) These changes could cost up to $500 a room. It adds up fast if the whole house has ugly ceilings.

Bedrooms

Small bedrooms are a double-edged sword. The value of a house or condo is heavily influenced by the number of bedrooms it has. However, if the bedrooms are so small that a bed won’t fit in them, most buyers will reject it anyway. I know you have all seen rooms like that. I see them all the time.

In terms of value, a condo with two bedrooms is a better investment than a one-bedroom one. A three-bedroom house is a lot better, economically, than a two-bedroom one. So, if you get the urge to knock down a wall to make a bigger bedroom, you could decrease the value of your property if you are creating a place without enough bedrooms for its type.

Small bathrooms

Bathrooms are surprisingly expensive to modify. It will cost you an arm and a leg to increase the size of your bathroom unless there is a closet next to the bathroom -- not on the wall where the plumbing is – that you can expand into. My advice is to get used to it or pass on the house.

Buyer's Choices

Shadow asked: How can buyers in a price bracket (say $50k wide) maximize their housing purchase - are there solutions to problems that are common in homes in that price range? Low ceilings, small bedrooms, cramped bathrooms, etc?

I see this as two different questions. 1. How does a buyer choose among the options in a given price range. 2. How does a buyer figure out which problems common in “compromise” houses are fixable and which should signal the call “run away!”

I began to answer the first question late last month. Take a look at that. In general, I advise my clients to be picky about location, since it is not in your control. The second priority is to establish a minimum size and a maximum repair tolerance. Then, choices are limited to smallish and in better shape, or larger and shabbier. 

As long as the size compromise will not make the buyer so cramped that he has to move too soon, this is a the way to a good choice.

Sometimes, my clients are searching in multiple towns in different price ranges. For example, if a client is trying to buy a single family house in Medford, Arlington, and Lexington, that buyer will see bigger and better houses in Medford at the same price, because Medford has a lower housing cost than the other two towns. My buyers sometimes set up search different maximum prices in the different towns. For example, a $450,000 limit in Medford, but a $550,000 limit in Arlington and Lexington. Their thought is: if I am going to live in my second-choice town, I will buy there only if it is cheaper to do so. (No disrespect intended towards Medford.)

Because ownership rights are so different in condos and single family houses, this is a compromise that takes some thought. In older housing stock, there is a higher number of renovated condos than fully renovated single family houses in urban areas, like Brookline, Cambridge, and Somerville. There are more newer construction or fully renovated townhouses and condos than newer construction or fully renovated houses in most moderate price ranges throughout the area. So, those that want lead-safe and newer may choose a townhouse or condo over a single family house that needs work. But, the negative is that many condos have smaller yards or shared yards. Condos also have less autonomy because of common maintenance with the other owners. Like the town choice criteria above, frequently my buyers will pay less for condos than for their own single family property. (A quick aside: Condo fees don’t really make a condo more expensive, unless they are wasteful. Most condo fees cover things that any owner is paying for anyway like water, insurance, maintenance, and repairs.)