So, you’re a single-income homebuyer at the back of the line for purchasing a house or condo. There are a few things you can do to improve your chances, but you might not like some of the options.
The first one is to buy a dump. Well, maybe not a complete dump, but a house that needs a lot of improvements.
“Lower your sights,” says Richard Courtney, a broker with Fridrich & Clark Realty who writes a weekly column for the Ledger. “Buyers might have to find something that needs a little work. They’re not in horrible shape. They’re not in move-in condition. Buyers need to take themselves away from what everybody else wants and take the thing that most people don’t want.”
Courtney says most people moving to Nashville want to buy homes in move-in condition. Single-income buyers can go for a lower-priced house that requires some improvement projects and avoid a bidding war.
Anyone who’s watched home improvement shows knows how an ugly duckling can turn into a swan with a little sweat equity. And homeowners can recoup the costs of those improvements, especially in a hot market like Nashville.
Top 2021 home renovations from Remodeling magazine include garage door replacements, manufactured stone veneers and minor kitchen remodels. New garage doors and the stone veneer returned more than 90% of the money invested. The kitchen remodel returned more than 70%.
Remodeling magazine defines a minor remodel as replacing appliances with more energy-efficient models, redoing existing cabinets, installing new countertops or a sink, adding new flooring and repainting.
Other improvements that will improve resale value and put more cash in your pocket include adding fiber-cement siding (a 69.4% return), replacing current windows with energy-saving vinyl windows (a 68.6% return) and vinyl siding, a less-expensive alternative to fiber siding that will yield a 68.3% return.
While out-of-pocket expense for home improvements might seem scary, the good news is that you might qualify for a home repair or home remodel loan.
How do you get a house you can improve? Steve Jolly, president of the Greater Nashville Realtors, also has a few suggestions.
“My best advice to folks is that if they really want to buy a home there’s a handful of things they can do,” he says. “Throwing money at it is one way to solve it. You have to be really fast and move quickly on writing an offer.”
Another is gathering as much information as you can about the house. “Information is important,” he says. “You have to make sure of what the seller has. You’re buying a home, but it’s built of lots of different components. You have to do some in-depth analysis to see what this home is really worth. You have to understand what the value of the home really is.”
Clues to a realistic value of a home can be found in determining the age of the air conditioning unit or water heater, the condition of the plumbing is in and how well the home has been maintained or updated.
You can possibly find the answers to those questions by asking your real estate agent to research the sale history of a house. Realtors have access to a multiple listing service (MLS) that can provide a history of the property and reveal recent renovations or home improvements.
“You really have to have that knowledge,” Jolly says. “You can’t afford to wait to get to inspection. The best buyers and the best sellers are the ones that are the most educated.”
A possible bright light at the end of the tunnel is work Realtors are doing right now with Congress. Every year, they spend time in Washington, D.C., advocating for issues of importance.
One of the hot topics now is potentially asking Congress to take a look at zoning in some cities to see if there are areas where there’s an oversupply of commercial and office spaces that could be converted to residential.
Jolly acknowledges this will be a hard nut to crack as zoning is controlled by individual cities.