Lake Martin Voice Realty
Archive for the 'Real Estate Tips' Category
I love the Wall Street Journal. Reading it is one of my favorite pasttimes. They have a regular section now called “Mansions” that covers real estate. On a recent Friday I was intrigued by a front page tease that read “Secrets of Top Brokers.” Naturally, as a real estate broker here at Lake Martin, I wanted in on the secrets. I flipped to page M1 and found the article, penned by Lauren Schuker Blum, titled “The Battle For the Big Deal.”
I was immediately disappointed.
The article was about the competitive nature of getting high priced listings in places like Malibu, LA, etc. It’s bottom line was that these ultra cool brokers have to battle hard to win a $40 million listing. They throw lavish parties and have in-house computer nerds to cultivate top secret databases of high rollers. Wow.
Don’t get me wrong, the article was well written and had plenty of pretty pictures. But the usability of these secrets by the average agent or even the average home seller is absolutely zero. (Who is going to spend $10,000 on a VIP house party?)
I guess I should not expect a practical article from a section of the WSJ called “Mansions.” I also can’t blame them for splashing flashy home pictures (I call it house porn) to catch the eye and entertain. I can’t help but wonder, though, what would happen if the WSJ would ask one of their talented writers, perhaps Ms. Blum, to turn their eye to the not so extraordinary. Sure, it’s easy to think of crazy ways to promote a home when Presidents have slept there and your potential commission is in the millions. What are the secrets of brokers or agents who actually sell normal homes?
Lake Martin Real Estate Secrets
I can tell you that there are no secrets for the Lake Martin real estate market, or anywhere else for that matter. If you want to sell a waterfront home, lot, or condo, you must pay attention to what I call the Holy Trinity of Real Estate:
- Pricing – You absolutely must price your home correctly. Yes, the market here at Lake Martin has rebounded since its low in 2008. But I don’t think we have evidence of price increases. Check my market reports and see if you agree. As a Lake Martin seller, you must price your home within 5% or 10% of what the market likes, or it will sit there. Buyers expect deals, research extensively, and can walk away. “I will price mine a little high. You can’t go up but you can always come down” you might say. I say – you can’t come down if you don’t get an offer. You won’t get an offer if you are priced too high to begin with.
- Marketing – You or your agent must market your Lake Martin home aggressively. A sign in the yard won’t do it anymore. Three fuzzy pictures in the MLS? Please. You have to have a full court press of well done pictures, full motion video, scads of backup information, just to stay in the conversation. You have to have a supercharged website to break through the noise and get found. In online marketing today, pretty is as pretty does. If people can’t Google it and find it, it might as well not exist. The old realtor trick of putting scant info out there so the buyer will call the agent and the agent will “sell them” on the home – is dead. Here is a modern truth – NO ONE WANTS TO TALK TO REAL ESTATE AGENTS – including me. They only call the agent on the last resort. Buyers research and research online so they don’t have to ask the agent, whom they perceive is cheesy and just out to say whatever. As an agent, I must realize that and earn trust by putting as much info online as possible. Another truth – put the marketing focus on the property. Not the agent.
- Staging – Staging is getting your home looking good to sell. Clean it up. Paint. Replace the rotten wood. Declutter. Depersonalize. Get all that junk out of the way that detracts from the view. People are here for Lake Martin. Don’t distract from that with petty repairable.
Are you considering selling your Lake Martin home, lot, condo, or some other property? We would love the chance to talk to you about it. We can get it done. We have the knowledge and experience to price it accurately. No other agency on Lake Martin, no matter how big, can even come close to our online marketing. The huge amount of traffic to this website are facts, not idle boasts. We can also help you stage your home to sell.
How to get started? Request a Comparable Market Analysis here or email us at info at lakemartinvoice dot com. Or call me at 334 221 5862!
Lake Martin is like most real estate markets, I guess, in that every buyer loves foreclosures. I don’t blame them. The thought of a buying a waterfront home or lot that is a heck of a deal because it’s a foreclosure is enticing.
But is it always true? Are all good deals on Lake Martin necessarily foreclosures? And are all Lake Martin foreclosures good deals? No.
The other day I was on the phone with a buyer from Florida that signed up for my waterfront foreclosure list. He was interested in looking at just about anything in his price range: lots, condos, homes, whatever. One of the foreclosures he asked to see was a condo in the Crowne Pointe condo complex, which is located off of Highway 50, kind of by Chuck’s Marina, in the Blue Creek area of Lake Martin. When I saw the price they were asking for the foreclosed condo, I thought, whoa!
Here’s a Condo That’s Cheaper than a Foreclosure
This particular condo I found was a three bed, three bath unit in Crowne Pointe that is listed for $289,000. Disclosure: it is a foreclosure, and is not my listing.
However, I was quick to let him know that I have this condo listed in Crowne Pointe, also a three bed and three bath, for $265,000. If you are interested, please click here for more information. It’s an awesome condo with its own deeded boat slip, a gigantic view, and two owners’ pools for funzies.
Yes, you read that correctly. My (civilian owned, regular seller) condo is priced $24,000 less than the foreclosure. That’s almost a 10% price difference. Why on earth would the foreclosure be listed higher than a regular sale? Who knows. Every case is different. Often, the banks must try higher prices due to the foreclosure proceeding. Sometimes banks are too big to spend a lot of time studying the market. Anyway, how would you like to be the guy bragging that he got a good deal on a foreclosure in Crowne Pointe, only to realize you paid about $24,000 too much?
This leads me to a few rules of thumb to remember:
Lake Martin Foreclosure Rules Of Thumb
- Just because it’s a foreclosure doesn’t automatically mean it’s the lowest priced option. See above for a glaring example.
- Just because it’s a foreclosure, and even if you think it’s priced well, it doesn’t automatically mean it’s a good deal. You will still need to do your due diligence to see if it makes sense relative to the rest of the market on Lake Martin.
- Just because it’s a foreclosure, doesn’t mean its legal woes are over. Lake Martin is located in Alabama, and here we have rights of rescission and other issues that could affect your purchase decision, to say nothing of possible property condition concerns.
If you’re interested in a waterfront Foreclosure on Lake Martin, great. Click here for my list. But be warned – getting a great deal isn’t as easy as going down the list like you were at Home Depot. I can help you learn about the market and help you focus your search so that you know a good buy when you see it. Don’t worry, the seller pays the commission, so it doesn’t cost you a dime to let me help you.
And if the Crowne Pointe condo I mentioned is still around, I would love to sell it to you!
If you are interested in waterfront homes, lots, or condos for sale on Lake Martin, you might like the latest feature of LakeMartinVoice.com.
I have added a new feature called “New Listings On Lake Martin.” See the right hand column of my blog, just below the top. There is a little plugin there that brings you the very newest homes, lots and condos on the market here at Lake Martin. In some real estate markets, this is called a “Hot Sheet.” So I guess I could have called it the Lake Martin Hot Sheet. Nevertheless, it’s a quick way to check what’s new on the market here at Lake Martin.
My goal is to have absolutely, positively, the best website and tools for searching the Lake Martin real estate market. I feel very blessed that this site continues to be number one in traffic, usage, and most Google searches for Lake Martin property. I will continue to tinker and experiment with new features like this to try and stay number one. If you have any suggestions or ways I can improve, please email at info at lakemartinvoice.com.
FAQ about New Listings On Lake Martin
- Are these only your listings? No, this list comes from the Lake Martin MLS, so that includes every single agent on Lake Martin, every single brokerage. It doesn’t matter who has it listed, I can help you with it.
- How often is it updated? It pulls about the last seven days of new listings from the Lake Martin MLS. So, if you haven’t checked it in about a week, you may have missed some. You may want to click here to search the Lake Martin MLS to see everything.
- What if I want more info on a home? Just click on its thumbnail and a new page, with that listing’s complete info will appear.
- What if I request info through your site, or give feedback by clicking a smiley face? The system will ask you to register by giving your name and email address. That’s so I can have a way to reach you and answer your request. Don’t worry, your info only comes to me.
- What is your spam policy? Don’t worry, I hate spam more than you do. In fact, I spend a lot of time and money to keep my site as virus and spam free as possible. I work way too hard to gain your trust to then turn around and spam you.
- Is this list waterfront property only on Lake Martin? Yes, this is a search that looks at three fields in the Lake Martin MLS: Waterfront = Yes, Lake Name = Lake Martin, and Age = < 7 Days. If you click on the Property Search button under the main picture, it will show you every single active listing in our MLS, waterfront or not. To view waterfront only on that page, click on the waterfront field and select “Yes.”
If you see anything you like, or want to talk Lake Martin real estate in general, I’d love to talk to you. Give me a call at (334) 221-5862, email me at [email protected], or click here to contact me. Thanks!
I once embarked on a mission to see how cheaply I could take a brown bag lunch to work.
I brought all my accounting skills (I was a controller at the time) and all of my family traditions to bear upon the subject. I used fast food ketchup packets, bought cold cuts in bulk and stalked the “almost stale” bakery section, but I hit a wall at around $1.10 per lunch. Despite way too much thought on the subject, I could not pierce the $1.00 per lunch barrier.
One day, as I bemoaned my plateau to the rest of the office, one of the ladies suggested, “Why not re-use your bags?”
It was so simple. So obvious; yet, so effective. Re-using my bags and other packaging plunged my per-lunch cost to the seventy-cent range.
This leads me to my point for those who are thinking about selling a Lake Martin home. If you are the do-it-yourself type and want to go the for-sale-by-owner route, let me share a couple of Special Weapons and Tactics that we Lake Martin Realtors use. They may appear obvious, but remember the paper bag. Simple solutions can take you to new heights.
First, take your pictures with a wide-angle camera lens. If you have or can borrow an SLR camera, you can buy a wide-angle lens that will make a world of difference. The lens might cost you $500, but remember how much you are asking for your home.
I’ve read good articles on Houzz saying the opposite is true – use a regular lens and be happy capturing less square footage in the room. For art’s sake, I agree. But I’ve found that wide angle lenses work well in some of the funky rooms we find in lake homes. If I can capture more space in a room with the wide angle lens, I’m going to do it. Bottom line, I’m neither an artsy nor accurate photographer and continue to try and learn. If there’s anyone in the Lake Martin area who is a budding photographer and would like to practice photographing homes, let’s talk. I’ll give you the credit, and you could help me up my photography game.
If you don’t have an SLR, and all you have is the camera on your smart phone, at least spend $50 for a wide-angle lens to put over it. Yes, no matter what kind of iPhone or Android phone you have, you can order a case to clip over it that will allow you to shoot wide angles. This is critical, because when people look at homes online, the pictures are a major way they weed out the tares from the wheat. Good quality photos can make or break your success.
Perspective is everything on home photos. Pictures look so good in magazines because professional photographers use different perspectives to present the best features of the room. Inside, a stepladder lets you point down into the room, as opposed to shooting flat across it. Try shooting some of your pictures from waist level, or from the height of a light switch on the wall. Combine with a wide-angle lens and note the difference.
To get a nicer picture of the exterior of your home from the lake, use a taller ladder on your pier. When selling a lake home, the lakeside photo is the most important. Most Lake Martin homes are at least five feet above the dock; from dock level, you often are shooting the house at a weird, unflattering angle. Get a tall ladder and set it up on the dock; the results will be much better.
Once you master these special weapons and tactics of Lake Martin Realtors, you can move on to others, like finding a new you-just-can’t-miss-it home.
If this sounds like a lot of hassle and you’d rather have a professional do the marketing work for you, give me a call at (334) 221-5862. You can also email me at [email protected] or click here to contact me. I’d love to help you!
Yes! I bought a helicopter! Lake Martin is a perfect place to showcase waterfront real estate from the air, so after a little research, I purchased my own helicopter so I can video my listings from all angles.
I’ve been honing my flying skills, and I finally worked up the nerve to take it to Lake Martin on Labor Day weekend. These things are a little tricky to operate – I had to (had to!) order a flight simulator video game to get used to the feel of the controls. And I still have a good bit of learning to do:
I already had a GoPro HERO3, so when I decided to do this, I had to do a lot of research on helicopters that could be used to carry this camera. I found the DJI Phantom online. Through my research I found that these are pretty easy to fly, on a relative scale.
So far I have learned two key things:
1) Do not take it out of GPS mode without a lot more practice. The Phantom has a mode whereby it can auto stabilize by using its GPS. I did OK when I was in GPS mode, but when I decided to get fancy and shut the GPS off, the wind caught the quadcopter and it took off.
2) Do not to get too high and fly into strong wind. I just don’t think the Phantom’s motors are strong enough to battle the wind for very long.
I do, however, think that filming video from the air is going to be a great way to showcase Lake Martin waterfront real estate. Once I get to the point where I can get usable aerial videos of Lake Martin, I think buyers and sellers will love to see this unique perspective.
If anybody out there has experience flying remote control helicopters, I’d love to meet you at the lake and learn from you. And if you’re a waterfront home, lot or condo seller on Lake Martin and are would like your property to be the first one showcased in an aerial video tour, give me a call. (334) 221-5862 or [email protected]
A shout out to Carlton Dean on the Scene, who is the best commercial broker in the Florida Panhandle: You have talked a big game about your flying skills, but have yet to post a video. Let’s see what you’ve got:)
I wrote the article below on Lake Martin waterfront lots for the April 2013 issue of LAKE Magazine. I got a lot of positive feedback from it, and even had it quoted back to me by a client: “John, we’ve thought about looking for a larger lake home, but I think we’re going to love the lot we’re with (and renovate).” If you missed it in print, here goes:
This month’s issue of LAKE magazine has a lot of great information about designing and building a home on Lake Martin. I think this is a superb idea. Not only does the lake boast many inspiring and original home designs, but we also have more than our share of talented architects, builders and subcontractors.
But with all this talk of site improvement, let’s not forget one important point when it comes to Lake Martin real estate: The lot.
That’s right, the lot. The dirt. It’s why you are here. Well, maybe not the dirt per se, but the fact that the dirt leads up to the water. It may seem obvious, but we all need to remember that the lake is what makes our real estate so valuable. The lot value is also the major driver in overall real estate value.
I see this time and again with buyers who are new to the Lake Martin market. They really have to wrap their heads around the concept that a little humble cabin on a huge lot with a big water view will likely sell for more than a newer home on a smaller lot in the back of a slough. It’s the facts. It’s market preference.
I also hear from people who want “just a little quaint cabin, a fixer upper, on a nice lot. I can do some of the work myself.” Sometimes, it takes a while for it to sink in for them that the proverbial “quaint cabin on an awesome lot” is a very popular request. Popularity equals price pressure. In our market of limited supply, price pressure always equals higher prices. Economics 101.
This rule does not limit itself to the small cabins. Even the larger waterfront homes are subject to the reign of the lot. One only needs a cursory review of county tax assessor appraised values to see that even on homes assessed above $1 million, the lot is likely greater than half of the overall value. Unless you are coming from major metro areas that have similar buyer pressure on land, that high percentage may be a shock.
I am certainly not the first real estate agent to give this advice, but I always tell waterfront home buyers, “You had better love your lot, because you can never change it.” Once again, an obvious statement; however, it is one we need to keep in mind. Most buyers work under a budget, and budgets mean tradeoffs. No two homes or lots are exactly the same, so if buyers find themselves trying to pick between two very close contenders, I always counsel them to buy the one with the lot that they like the best. They can always change everything else.
This magazine is chocked full of friendly people to help you improve or redesign everything other than the lot. On that point, be sure not to build too much house on too small of a lot if your goal is to increase your home’s overall worth. If your goal is to have fun or just to customize, go for it. I don’t want to discourage “dream home” activities, but you have to understand that every improvement may or may not increase the overall value of your real estate asset. Your particular improvement may increase value, but not necessarily. It all depends on what the market has proven that it will bear. Think about it: Would an Eskimo pay extra for an outdoor shower on the side of an igloo? Would someone living on the equator pay extra for an electrically heated, snow-and-ice-proof driveway? Not likely.
Don’t misunderstand me – I am not trying to hold you back from home improvements or building. Far from it. Just remember what we have discussed here. And if you can’t be with the lot you love, honey, love the lot you’re with.
Lake Martin home remodels are common in the Little Kowaliga / Real Island area. It’s an older – and very popular – part of the lake, so many of the homes have been there for years. We last visited Lee and Amelia’s Little Kowaliga cabin renovation in May. Doug Fuhrman of Southern Traditions Construction has since put the finishing touches on the home, and a lot of summer fun has already been had.
I think it’s a great example of a smart renovation – They made the existing square footage make more sense, and they added living space where it matters most: waterfront. The bricks and sticks of a lake home pale in value when compared to the dirt beneath them, so this couple first got the lot they wanted, and then created the home they needed. I dropped by last week to check things out:
BEFORE renovation, lakeside
Enclosing the lakeside deck with a screened porch was a no-brainer. They added lots of waterfront living space that can be used almost year round. For those of you wanting to know what adds value to a lake home, it’s not the closets. It’s usable waterfront space. I’ve never had a buyer object to a large screened porch. Ever.
BEFORE picture of the 1980’s kitchen:
Amelia updated everything in the kitchen, keeping the layout of the appliances the same. They swapped out the peninsula for an island, and gained a little more room to move about the kitchen. The floors, the windows, the walls – all new and fresh.
BEFORE – The main living area with no lakeside access and the deck outside:
The old lakeside windows went out, and new sliding glass doors went in. The screened porch replaced the old deck, and Viola! Room for everyone with a view of Lake Martin.
BEFORE, the home had two bathrooms, but they were awkward and outdated (and pink):
They had some fun with these bathrooms, and for those that are wondering, that is wood grain tile at the base of the shower. Pretty neat.
BEFORE picture of a bedroom with the familiar green carpet:
The bedrooms have all been freshened up with new carpet, lighting, windows, etc. These built in bunk beds have space underneath for stowing luggage and whatever else their three sons and their buddies might bring to the lake. In the future they may add drawers for concealed storage.
BEFORE, the side entrance
The tiny (and not very useful) covered side porch by the entrance of the house was enclosed and became part of the new living area. New decking replaced the old concrete slab entrance, and everything feels shiny and new.
My thanks to Lee and Amelia, and to Doug Fuhrman at Southern Traditions Construction for letting us follow this renovation. So it’s a fresh start for this lake address, and now the Lake Martin fun continues . . .
If you’re a buyer who is looking for a Lake Martin cabin to renovate, give me a call, and I’ll help you find a property that makes sense for your vision and your budget. I can help you find the right combination of lot and home, just like I did for Lee and Amelia. Give me a call at (334) 221-5862, email me at [email protected], or click here to contact me.
Previous Posts in this series:
We humans, especially Southerners, like the art of storytelling, don’t we?
We like legends. We like to talk about the way things were back then.
For Lake Martin, 2007 will always be “The Year of the Drought.” Similarly, 2009 will be thought of as “The Year of Alan Jackson at Aquapalooza.” I have no doubt that 2013 will become “The Year of FERC Relicensing” because the potential changes in the water level rule curve will impact the next forty years.
As I study real estate trends in the waterfront market for Lake Martin in 2013, I have a hard time separating market reports from the mammoth issue of relicensing the dam. Usually, when people ask, “what’s going on at Lake Martin?” I give them a ten second market report. This year, however, I have talked about FERC.
But, if we can all forget about that for a moment, and focus solely on what’s happening in the real estate market per se, I think we find something very interesting. There is a notable trend at Lake Martin that, in my judgement, is yet another sign pointing to the overall health of our market.
The big story at Lake Martin in 2013 is waterfront lot sales.
Yes, lot sales.
Do you remember 2008? You might know it as “The Year of The Bank Crash.” For those who don’t, I can tell you that getting a loan to buy a lot in 2008, and even in subsequent years, was dang near impossible. If a bank or mortgage lender smelled, perchance even suspected that you wanted a loan on a lot, they ran the other way. If that lot was located in a subdivision that was lightly populated, well, they called Father Merrin for an exorcism.
Please take a look at the Waterfront Lot Sales chart. Sales are blistering. Through the end of July, there have been 37 waterfront lots sold through the Lake Martin MLS. That is only one fewer sold in all of 2012 and only two fewer sold in the 12 months of 2011. In other words, this year it only took seven months to sell as many lots that were sold in twelve in each of the two prior years. That’s growth, neighbors.
Lot sales mean construction. Construction helps the overall economy and it points to more confidence for the future. If no other lots were sold in 2013, the lake would have a good year. If 2013 lot sales continue on pace with prior years, it will be a great one.
Lake Martin Home Sales in 2013
Don’t let all this talk about lots obscure the good news about homes. Waterfront home sales on Lake Martin are once again strong in 2013. One can see from the cumulative graph attached, that as of the end of July, 2013 is running on pace with 2012. As I am sure we all remember, 2012 was the second best waterfront home sales market on record. When we look at the entire lake real estate market, with all agents, all brokerages that participate and report to the Lake Martin MLS, we see that at July 31, 2013, 139 waterfront homes have been sold. This is statistically significant to 2012. By the end of July in 2012, 140 homes have been sold. I don’t consider the one home difference to be a big deal.
The bottom line is, 2013 is another great year for Lake Martin home sales. The more interesting thing for me to consider is that such great years are becoming routine once again. Remember, 2008 was the last year of decreasing numbers of homes sold on Lake Martin. Every year since 2008, the current year has beaten the prior year’s numbers of homes sold. The market has improved.
Lake Martin Home Prices
Whenever anyone hears the words “improved market’ – it’ s natural to wonder if prices have risen along with the home sales figures. Prices, however, have remained steady. Have prices in 2013 risen? I don’t know yet. Because Lake Martin has such a small sample pool, I only calculate price trends once a year.
However, if Lake Martin continues to beat the prior year in numbers of home sold, and supply does not out strip demand, one of these days we will see price increases. When that happens, we can call it “The Year That Prices Finally Rose.”
We only have 11 days left with a chance to positively affect Lake Martin for the next 40 years. FERC has given us a way to comment to them and let them know that we favor the 7 foot winter pool and the optional full pool into October.
It only takes 3 minutes! Do you have 180 seconds to help? Please do this before August 13.
Here’s how to eComment to FERC:
1. Go to this website by clicking on this link:
or copying this address and pasting it in your browser:
2. Click on the orange button at the top that says “eComment does not require registration, click here to proceed”
3. Fill out your information and click Authorize. It will send you a link to the email address you typed in.
4. Go to your email account and click on the link it provides
5. Select the project by searching for Lake Martin’s project number: P-349-173
6. Once you search it will offer Lake Martin as a result. Select it.
7. Type your comments in the white box. If you would like to comment in your own words, please do so. Speaking from the heart is always best. But, if you are at a lack of time or words, you may feel free to use the below, just copy and paste in the white box:
I am in full support of Alabama Power’s draft EIS for the Martin Relicensing project. In particular, I support:
1. Dropping the winter water down only 7 feet as opposed to 10,and
2. Having an optional full pool period to October 15, weather permitting.
I think the economic benefits are tremendous and will benefit thousands, and I am confidant that Alabama Power has done the research to prove the potentials for below the dam flooding, in an already existing flood zone, are minimal.
8. Submit it. That’s it! You will receive a confirmation email from FERC.
What else can you do?
1. Ask your spouse and all non-minor family members to comment. Remember, you don’t have to be a property owner to be a stakeholder.
2. Forward this to any and all other family and friends that love Lake Martin
3. Ask them all to comment ASAP, certainly before August 12.
It only takes 3 minutes and this affects your children, grandchildren, and great grandchildren!
“What if” FAQ?
1. What if Lake Martin IS NOT granted this new rule curve? Will the real estate market crash as a direct result? Will the sky fall? Of course not. Lake Martin has existed for about 40 years under the current 10 foot winter drop and starting the drop after Labor Day. The market has been outstanding, in general, over those 40 years. Let’s face the facts – we will still be the Crown Jewel of the South, with or without this chance at improvement.
2. If Lake Martin IS granted the new rule curve, will the waterfront real estate prices skyrocket, and will chocolate and caramel flow from the top of Acapulco Rock like a Willy Wonka dream? Not necessarily. I am not guaranteeing anything. But I am saying that this is a historic, once in every other generation chance to improve. It’s an improvement that comes at almost no risk whatsoever. It is well worth our 3 minutes to comment and give it a shot.
If you need more info on this huge issue, click here.
Many home buyers think they do.
“Oh, we love a project,” the wife might say while the husband rolls his eyes in the background. Or a husband might wave his hand at a sagging roof and say, “I can handle this, no problem,” while the wife looks on in shock at the man who doesn’t even own a hammer.
I would venture to speak the unspoken thought of us real estate agents, and say, “Really?”
Can you really handle it? Those of you with construction experience, I will acquiesce to your judgment, but only when you realize that on Lake Martin, where so much value is in the dirt, a fixer upper can be a big project.
Plus, it’s relative. One person’s tear-it-down-and-start-over home is what I might call another person’s “tooth brusher,” as in, “It’s perfect, just bring your toothbrush.”
Whatever your self-assessment, before you buy a home that you are planning to fix up, I would put three questions before you:
First, do you have the budget?
The home improvement shows on TV fail to mention the pesky issue of budgeting. If you buy a fixer upper, you need to set aside some cash above and beyond the down payment to do the work. For instance, if you buy a home at $300,000, more than likely you would get an 80 percent loan or $240,000. That leaves about $60,000, plus closing costs, that you would need to have at closing. If you planned to spend $30,000 on renovations after you buy, that’s about $90,000 cash you need to have budgeted.
Many buyers assume they will just get their renovation budget from their lender. Perhaps this worked more easily before 2008’s taxpayer bailout of the banks. An extreme example of the old way went like this: you bought a home for $300,000; it appraised for $500,000, so at closing the bank gave you $75,000 that you used for renovations. Instead of having to bring money to closing, the bank gave you money. No more. First of all, I have not seen an appraisal come in appreciably higher than the contract price in a long, long time. Even if it did, if a buyer is getting conventional financing, the loan underwriters would have a hissy fit when they saw that the buyer was putting no money down and was walking away from closing with cash. It just doesn’t happen these days. You had better have some cash for renovations.
Secondly, do you have the patience?
Once again, the home improvement shows come into play, creating unrealistic expectations for some buyers. Sure, they show little problems here and there during the fix-up project, but these snafus are easily fixed by the home reno hero. What you don’t see is the extra money it takes and the time the project was set back by the bump in the road. Home renovations are infamous for dragging on longer than expected. Are you hiring an experienced contractor who can anticipate the potential hazards and help you navigate? Are you patient enough to expect the unexpected?
Trust me, your project will not be wrapped up in a neat 30-minute TV show schedule. Things run long. If you go into the project knowing that, you will be fine.
Lastly, do you have the time?
You have gotten this far, so I assume you have passed the first two tests. You have some money set aside for the home renovation, and you have promised your contractor you will be patient during the fix up. But do you have the time to make it happen?
Remember, we are on Lake Martin. You would likely be buying a home to use during the warm months. If you have spent the spring looking around, finally settled on a home, agreed to a contract with a seller, and closed, it might be Memorial Day. Look at the calendar and start counting ahead.
If your contractor tells you it’s an eight-week job, and you factor in two more weeks to be conservative, that’s 10 weeks. Ten weeks after Memorial Day is August. Are you ready to start a project that will take two thirds of your first summer on the lake? Think about it.
True, I have made the argument that Lake Martin is more than a Memorial Day-to-Labor Day place. We have year round activities. But think twice before taking on a huge fix up project in the first 12 months you own your home. I pass along the advice of architect Bryan Jones: Live in it a year. Have fun. Learn the home. Then make a plan.
I think you will be a lot happier in the long run.
The rewarding side of fixing it up
If you have the time, money, and patience to renovate a Lake Martin home, the rewards can be huge. Don’t think I’m against a fixer upper – not at all! I enjoy sharing “before” and “after” pictures of clients’ renovations because it helps others see what can be done with older cabins on Lake Martin. If you get your numbers right, you can end up with a super lake home and a solid investment. I just finished a series on a client’s cabin reno in the Little Kowaliga / Real Island area, and I’ve followed a couple of transformations in Parker Creek. If you missed them, here are the links:
If you’re looking for a Lake Martin cabin to renovate (or if you prefer a move-in ready home), give me a call – I’d love to be your realtor. I can help you with any property on the Lake Martin MLS, regardless of who has it listed. Call me at (334) 221-5862, email me at [email protected], or click here to contact me.