We have only lived in our house for 6 months but have made about $10,000 in improvements. Too early to sell?

Asked by Jamie, Hartland, WI Thu Mar 5, 2009

We don't really need to make a profit at all. We basically want to get back what we bought the house for. We bought the house for $206,500 6 months ago and now are thinking about building a house. It is very affordable to build a house right now. Should we wait it out or should our improvements be enough to get the price that we want?

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7
Karen Wenzel,…, Agent, Brookfield, WI
Thu Mar 5, 2009
Jamie,
As the other agents said, there are many factors to consider. But, if the improvements you have made are items that Buyers can see as a benefit- such as new flooring, cabinetry/countertops, updating, or mechanical replacement - this may make sense to sell when everything looks shiny and new. Also, a large number of the Builders are willing to make compromises since they want to keep their crews working. Material costs in many cases have gone down also.
Weigh all your options. Meet with a couple of builders, get some hard figures so you can make an educated decision on which way to proceed.
If you got a great deal on your current home and with the improvements you won't be priced over comparable homes- now may not be a bad time to sell.

Having personally built 3 homes in the past, it gives you a great feeling to create your personal dream house. But, again- do your homework first.

All the Best to you and your Family!
Web Reference:  http://GoPackerUp.com
1 vote
Kathi Panor, Agent, Sarasota, FL
Thu Mar 5, 2009
Hi Jamie, there are many factors that need to be taken in before deciding....was your home only worth what you paid for it 6 months ago - or did you "get a deal"......the improvements that you made - do they increase the value of your home. I would ask several Realtors to do market analysis' of your home before you decide. It is a great time to build right now. I work in the lake country market - give me a call if you want a market opinion of your home - no strings attached.
1 vote
Debby Thomps…, Agent, Wauwatosa, WI
Thu Mar 5, 2009
The price range that you are at is good right now in this market. It would depend what improvements you have made. The hartland area is has not gone down as bad as it has in Milwaukee. The main thing that is driving the pricing down in Milwaukee is the foreclosures and the short sales. If you don't have any in our area that will help. But the price of your home is selling at this time.
Web Reference:  http://debbyrealtor.com
1 vote
Edith Karoli…, Agent, Winnetka, IL
Thu Mar 5, 2009
Hi Jamie,

Not knowing your city and its market activities in detail, my first impulse is you bought 6 months ago and you put 10,000 in improvements, the first impulse answer is YES it is tooooooo early to even get your money back.
Normally under the very best of circumstances and a beautiful Seller's market you will not get your improvements back within 6 months and certainly not the full amount, so just there you will take a loss.
then you will have to pay closing costs, commission of working with a Realtor (which in this market is highly recommendable) and negotiations with the potential buyers as they know it is a buyers market lots to select from and when the sellers need to sell a lot to negotiate for, if not with you then with another seller!

So I think your very first step is to connect with a truly good and experienced Realtor in your area, so that not only will you get a professional's opinion of how well your home will show and compare to other similarly sized, and priced homes - in order to initiate a quick sale you want yours to be the best for the best price if possible. The Realtor will give you his opinion about that, will provide you with a detailed market analysis of what has sold very recently in your size, style, lot size, property upgrades and price range, and will also hopefully provide you with a general market overview of your area to let you see what you are competing with, depending on what that market overview shows you, you will be able to make an educated decision of whether you can compete with those other homes (are they bigger, better updated at the same price or not etc.)

If you are not currently committed to a local real estate agent, let me know and I would gladly refer you to a trusted Realtor/Partner/Colleague of mine in your area.

I wish you luck, it is a difficult economy and it is a difficult market and by the way it is also not easy to build your own home, make sure that also there you get as much good professional advice as possible before going into it!

Let me know if I can help you with a Realtor.
Sincerely yours,
Edith YourRealtor4LIfe! Working always in the very BEST interest of her clients! And so do my trusted
Partner/Agent/Colleagues all over the US

PS by the way if you ever come across anyone you know who is moving to Chicago, the larger Chicagoland area or anywhere in Northern Illinois would you send them my way? thanks! I promise 1st class, detail oriented services here!
1 vote
David Belman, Agent, Waukesha, WI
Mon Jun 28, 2010
From a builders standpoint, now is an excellent time to build! The interest rates are at historic lows and you can even lock in rates on construction loans long term before you break ground. Prices are fantastic and you can get the best crews and more service from your builder right now. There is nothing like a new home and getting to make it "your own". If built in the right area a new home will appreciate much faster in value than an existing home.

However, only owning the home 6 months and then adding $10,000 in improvements it is not likely that you will be able to sell it and break even after paying a list/sell commission, transfer fees, moving, and everything else. If you are okay with that scenario, go ahead and at least take a look. It doesn't cost anything to get a market analysis from a Realtor, or to sit down with a builder and discuss plans and pricing.
Web Reference:  http://www.belmanhomes.com
0 votes
Jamie, Home Seller, Hartland, WI
Thu Mar 5, 2009
Just to clarify. We only need to get enought to pay off our loan, we aren't too concerned about getting the money back for our improvements. Maybe that is nieve of us. When the appraisal was done the house was appraised at 210,000 exactly. The previous owner told us that 2 years prior the house had been appraised much higher and that was before he added the new roof. (Obviously the market was much different then). The improvements that we have made are the following: New High Efficency Furnace; New Energy Start Fridge, Stove and Hood Fan; New Carpet throughout the house; New Ceramic Tile in Kitchen, Dining Room and Bathroom; Removed Wallpaper in just about every room and painted; New Vanity, vanity top and Medicine cabinet in bathroom; Added crown molding in kitchen to match the rest of the house; New Roman Shades and Window treatments in whole house; new hardware on kitchen cabinets. I think that covers it.
0 votes
Alan Strange, Agent, Westminster, CO
Thu Mar 5, 2009
That depends on the market activity in your area. The saying goes that you make your money on the purchase so it would depend on how homes are selling in your area. If you bought six months ago check with the agent that helped you through the process and get their opinion on values in your area.

Regarding renting: they have made recent lending changes which require a 30% equity position plus six months of reserves in order to have a lease offset the debt service. If that doesn't apply you'll need to qualify for the new house and the existing house at the same time. Hope that helps.
0 votes
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