Expert: Hans Weber, Licensed Broker Associate - 1/13/2006

Question
We recently went through a 50-year old home, 4300 sq. feet, inground pool.  NOTHING in the home has been updated since at least the 70's.  It needs to basically have new windows, new carepting/flooring throughout, new appliances, the kitchen needs to be gutted (new cupboards, etc.)  All the bathrooms would eventually need to be updated.  It is on a half acre.  The taxes listed the FMV at $261,800.  The home was listed at this value in July 2005...the house is still for sale but the price has come down to $235,000.  My husband and I really think the house could be wonderful once remodeled/updated.  We think that will cost at least $35,000-$45,000.  The realtor admited the house had been grossly overpriced and the taxes on the house are also out of line with the actual FMV which will obviously be determined once the house finally sells.  My husband and I are thinking of offering $215,000...but do not want to offend the sellers.  Are we out of line?

Thank you!

Answer
HI Nicole,

Thank you for your question.  

It sounds like a typical real estate scenario.  You like the house and have watch it on the market as the price got closer and closer to a price you feel it is worth.  I would offer the 215 now and maybe they will counter offer by coming down 5 or 10 and you can settle at 225?  Do it soon though!  I am sure that since you think it is close to being priced right other people might be thinking the same thing...

So, now you buy it for 225 and update it by spending 45k and it is then worth fair market value of 261,800.

Good luck and let me know how it turns out.

Hans