What A Year This Has Been
What A Year This Has Been
As a society, we’re not used to going without the things we want — except for some past pre-holiday quests for Cabbage Patch Dolls, Beanie Babies and the occasional must-have limited-edition Nikes. But since March 2020, many things we were used to having were suddenly beyond our reach.
No amount of money or connections could help us secure simple things like paper towels. Twelve months later, when in the supermarket, I still marvel at stocked shelves. I remember when they were empty the same way my grandparents remembered rationing. Well, maybe not quite the same.
For the past two months, we’ve been laser-focused on finding vaccinations for ourselves, for our parents and for our grandparents. Like we searched for paper towels in fear of “Sold Out” signs, we balk at “No Appointments Available.” Nonetheless, we keep looking, discussing, sending hints and successes to our contacts. Imagine: grown-ups posting photos online of their masked selves, sleeves rolled up, getting vaccinated? Now, I hear myself congratulate friends who score appointments for vaccinations — because many people still can’t get one.
While we no longer face a shortage of grocery items and more people are getting vaccinated every day, there is still a shortage of homes to rent and buy. And it remains that no amount of money or connections can help many would-be Hamptonites get what they want. And it is not pretty. Many of us are used to getting what we want, when we want it.
I recall an open house where in the course of four hours, 16 parties were given appointments 15 minutes apart. Appointments were required at the time for open houses because Covid rules only allowed one party in a house at a time. As you know from my writing about the challenges of scheduling, it’s hard to be exactly on time and to rush interested buyers out of a house they may want to purchase, so some people had to wait. That did not go over well. By the end of the day, the owner received several offers to purchase; only one party prevailed, and the others, not used to waiting or losing, waited and lost. This continues to happen over and over again.
Photo by Lena Yarmenkaro
Tired of looking, waiting and losing?
Let’s say your target all-in budget is $5 million. Chances are you are looking in a range from $5 to $5.5 million, and if you are like most, you favor new construction and ready-to-use re-sales. Of the few such homes on the market, the ones that most appeal to you are either in contract before you get to see them or the listing agent reports there are multiple bids. What are you supposed to do?
Look differently.
Use your patience and ingenuity instead to look at resales in the same locations as those homes but priced much lower, even as low as $1.5 million. At the lower end, those properties would likely be tear-downs. More expensive ones may need some TLC, an addition or a lot of work. But $2 to $4 million of your all in housing budget can get you a lot of improvement. There are a few advantages to this approach:
Less competition – not having to pay asking price or above
If there is competition, you’d be in a better position to go higher than those with lower budgets
Lower closing costs
Ultimately, with some work, you can get what you want
On the flip side:
It will take months or longer to have that home
You may not see the potential immediately
If you’re concerned about wait time, know this: I can’t tell you how many customers looked for a home last year and are renting again for 2021 while still looking to purchase. By the way they are going about this, I predict they will be looking again with the hope of being in that imagined home for the 2022 season. Instead of looking for the house that’s perpetually out of reach, why not look for fixtures for the house you are actively creating
Most of us do not have the vision to see a 2,000-square-foot, one-level home built decades ago become their 21st century 6,000-square-foot dream house. Fair enough. But there are many professionals who can not only do it with you, but who can show you many such transformations and even build a virtual version of the house you want. You don’t have to have a vision when you can hire someone to help you see it.
By going after the homes in need, you will probably encounter more motivated sellers because re-sales are generally on the market longer than new and move-in-ready homes. There’s a good reason for it, by the way. Marketing aims to make the homes, even tear-downs, look attractive. A $2 million fixer-upper should be pitched to buyers with much higher budgets who have the money to fix it up as needed, but instead, it captures the interest of those with $2 million to spend at most. Therefore, these homes typically attract the wrong buyers — those who don’t have the means to renovate or rebuild as needed.
If you prefer to wait for a brand-new or a move-in-ready home, be patient, be prepared for the competition, be quick, be ready to pay the asking price or more and please use a local attorney. Knowledge of current market conditions as well as zoning issues, especially if work needs to be done, is essential now.
Or you can take a chance on a house that normally wouldn’t make you look twice. You might be able to turn it into the perfect house for you.