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.

Repair costs

When I am looking at properties in the metro-Boston area, it is impossible to judge their value without considering the cost of repairing and maintaining them. It is way too easy to be wrong, when getting specific about repair costs. When a problem begins, it is much cheaper to repair than the same problem left for years to get worse. Deferred maintenance costs roughly five times more to repair than if a problem is solved when it begins.

The general rules:
The most expensive things to repair are on house features which must stand up to the elements. The exterior of the house -- from the roof to the foundation -- have the hardest job and need to be tended most. Expect that replacing a roof, re-siding, replacing windows, rebuilding foundations and waterproofing basements are your biggest ticket items. Expect that most of your 5-figure repairs will be to exterior features of a house.

After that, any repair or change in design which takes more than one type of worker will cost more, per labor hour, than something a single type of worker can do. For example, kitchens and bathrooms need electricians, plumbers and carpenters. They need to coordinate their schedules and share space and responsibility. Because of this, the cost goes up astronomically. Whereas, one or more carpenters can come in to change every interior door for less than the cost of a new bathroom.
After the multiple-worker kinds of tasks, specialized workers cost more than general workers. Plumbers and electricians get paid more than carpenters. Finish carpenters -- the ones who do custom cabinets, fine wood trims and such -- get paid more than the ones who build decks.
If you think in terms of labor costs, plus materials, you can get a rough idea of repair costs. Get time estimates from repair workers. To get material costs, you can visit any large hardware outlet or kitchen and bathroom retailer.

Then there is maintenance.
Houses age. Exterior paint needs regular touch-ups at least every five years. Roof shingles wear out every twenty or so years. Boilers last twenty years or more. Hot water heaters last a decade or less. Appliances in the kitchen fail in ten to fifteen years or so, depending on their initial quality and use.
As a home buyer, you are making a mistake if you aren’t prepared to spend an extra ten percent over your monthly mortgage payment to keep your property in good order. There will be projects cropping up every year.

Readers, what goes on the list of repairs any home needs in a given ten-year period?