Remodeling vs. Tearing Down a Home
LESLIE: Well, with the real estate market being soft all across the country folks are wondering whether to sell, tear down, move, what to do and that’s what Kemper in California wants to talk about. What can we do for you?
KEMPER: Well, I have a house for sale that I just never had the gumption or the resources to whip into shape.
TOM: (chuckling) OK.
KEMPER: So it’s got …
TOM: So you admitted defeat, huh? (Leslie chuckles)
KEMPER: Well, what I discovered was I was going to repair and expand it and then I realized the cost of construction is pretty extreme and I was better off the way things were; just buying something that was more suitable for me.
KEMPER: So what I want to do is sell this place but the different prospects – some think, “Oh, I can fix this up”; others think it’s got to be torn down. My impression is that the fast flip type, you know, professionals want to knock down, start over and give me a low bid. But my concern is that the county wants this thing fixed one way or another – knocked down, something – and they won’t give me a clear indication of whether it’s up to the buyer to fix it or knock it down or whether the county is going to be heavy-handed and say, “No, you’ve got to knock it down.”
TOM: I would do two things. Number one – I would hire a professional home inspector who’s going to be an independent expert to go through that house and really give you an honest assessment of its true condition. And the home inspector, being the kind of person that inspects homes all day long that are in real estate transactions, will be able to tell you how yours stacks up and what’s serious and what’s not serious. The second thing I would do is recommend that you hire a real estate attorney, because as inconsistent as the advice is that you’re getting from the county, it is going to be based in law and they can’t just willy-nilly tell you to tear down a house. There are laws to protect people from overaggressive bureaucracies like that and if you’re getting that kind of information you need a real estate attorney because this is a big investment and you need to get the right information.
So I would spend a little money on professionals. Get to the bottom of this, Kemper, and then you’ll know what you can do with that investment.
KEMPER: OK, but if I get a contractor in here, some professional that says, “No, this can be fixed up,” I’m in pretty good shape, right?
TOM: Well, that’s why I’m telling you to get a home inspector; not …
TOM: Not a contractor. Because if you call a contractor they’re going to give you a contractor’s solution which involves hiring them.
KEMPER: I see what you’re saying. Yeah.
TOM: I’m trying to help you get impartial expert advice …
TOM: … so you really know what’s going on …
TOM: … and then you can take the appropriate first step.
KEMPER: OK. That’s great. Thanks a lot.
TOM: You’re welcome, Kemper. Thanks so much for calling us at 888-MONEY-PIT.