Dirty. Dusty. Junk-ridden.
These are hardly qualities most seek when buying a home. Indeed, most buyers can’t see beyond the grime and clutter of bad housekeeping to recognize the attributes of a solid, well-located property. But seasoned real estate investors know better.
“I like dirty houses. My antenna goes up right away,” says Joe Palmer, the broker-owner of a Coldwell Banker realty office.
Besides their personal residence, Palmer and his wife, Kathy, own 12 investment properties. And one of the best deals they ever captured was on a house so untidy and crowded it looked “haunted,” he recalls.
The bargain home was a 50-year-old white clapboard place located within a proud middle-class community. It was inhabited by a retired ship captain who was an extraordinary pack rat.
In fact, the reclusive gentleman had accumulated so many collections, ranging from old AM radios to tins of candy made for air-raid shelters, that there was no room left for visitors to sit down. Furthermore, his kitchen appliances were encrusted with dirt and several foul-smelling cats roamed the house.
“It was almost bizarre,” Palmer remembers.
Most home shoppers would automatically reject such a house. But Joe Palmer sensed opportunity. After investigating to be sure the property was fundamentally sound–for instance, that it had a good roof and heating system–he made a low offer.
As it worked out, Palmer got the property for half what it would have cost in good condition–“a terrific deal” in his opinion.
Granted, it took sweat to bring the three-bedroom house up to neighborhood standards and make it a good rental prospect. And because the retired ship captain left many of his belongings behind, there was a lot of junk for disposal. The entire Palmer family had to pitch in, filling two oversized dumpsters with the man’s castoffs.
The Palmers also scrubbed, cleaned and painted the interior where tobacco stains had soiled the walls and ceilings. Also, they replaced ragged draperies with fresh window coverings. But in the end, they owned a quality asset for an unusually low price.
“Sometimes people’s lifestyles hurt them economically when they go to sell,” says Palmer, who has logged 21 years in the real estate field.
Other real estate experts agree that untidy homes can be good deals.
“When you see a house that’s not well kept, normally this translates into a bargain,” says Peter G. Miller, the author of several books on real estate. If you’re looking for an unusually good price on a poorly kept home, the trick is to see beyond the dirt to the possibilities for improvement, something most buyers can’t do, says CJ Neumann, a RE/MAX agent affiliated with the Residential Sales Council, a national educational group for realty sales people.
“When a home is dirty and badly decorated, these are the first things that hit the buyers when they walk in,” Neumann notes.
But, it’s a smart purchaser who understands the emotional as well as financial components of the buying process and isn’t automatically put off by the sight of cobwebs or dirty windows. This is especially true nowadays, when so many owners are two-income couples who lack ample time for good housekeeping.
“It’s not like the ’80s when more moms stayed home,” Neumann says.”These days, housekeeping is the last thing many people do.”
Are you willing to buy into someone else’s mess to get a low price? Then these three pointers could help:
1. Be sure that the untidy house is not seriously flawed in other ways.
Many people who are willing to clean and paint will refuse to buy a true “fixer-upper,” which needs extensive renovation or has structural problems.
The Palmers, for instance, would never buy a home that was poorly built or had badly sloping floors.
For most buyers, engaging a professional home inspector is vital, especially if the seller is a poor housekeeper who may have deferred basic maintenance as well.
2. Consider obtaining a two-part property appraisal.
Palmer suggests that someone considering buying a home in poor condition might wish to hire an appraiser willing to judge the home’s value both in terms of its current market worth and what it would fetch after superficial improvements are done. A formal appraisal typically costs several hundred dollars but could spare you the much more costly mistake of overpaying for a place that only seems like a bargain.
The appraisal might also yield the pleasant discovery that the untidy home could pick up a great deal of value simply through the benefit of a wash pail and paint brush, Palmer says.
The owner of a poorly kept home often has to let it go for 15 to 20 percent below market value. Yet it can cost less than half of that to make it look good, Palmer says, with still more savings if you do the work yourself, Palmer estimates.
3. Never let the buyer know you think his home is untidy.
“If the buyer intimates in any way that the house is less than pristine, it could set off a war between seller and buyer,” says Miller, author of “Buy Your First Home Now,” a HarperCollins book.
Believe it or not, some very sloppy people consider their homes antiseptic, Miller says. And other individuals deliberately choose a cluttered lifestyle. “A home I might see as disorganized and messy, the seller may see as comfortable,” he says.
If they don’t price at a discount from the outset, and refuse to heed their agents’ suggestions that they clean, many untidy homeowners are forced to learn their lesson over time. Their homes often go unsold for months until they must accept a below-market price.
Because of the power of emotion, it’s often easier to play a waiting game than to try to reason with the owner on pricing during the early stage of the listing, Miller says.
“Buying a home today is part economics and part psychodrama,” he observes.
