Kinda hard since you have an offer and an acceptance. Personally, I ignore ‘assessed value’ since that is up the local County/City politician and usually means little. I’d much rather see a couple of appraisals, particularly for a house that needs repairs. My RoT is to deduct the cost of repairs +at least 30% for your time/inconvenience.
I’m reaching the point where I’m not as concerned with economic return, but with doing what I want. If my kids get a smaller inheritance as a result… oh well.
If you have a $500+k budget for renovations, you should consider scraping it and building exactly what you want, using the latest building technologies. I have a friend who recently built a 2000 sq ft net-zero house using modular construction for way less than $500k.
Assuming this property is in MA, the towns here are legally required to assess at “market value”, which usually lags the actual market by a year or so. So getting something significantly under assessed value is pretty unusual.
@shawbridge what is the land worth compared to the purchase price?
@shawbridge , we are very open about having our house be a bribe to our children and family to want to visit: clay tennis court, salt water pool, hot tub, sauna, rural setting, etc.
We overspent on the renovation. We don’t feel we wasted the money.
Reasons we would stay in our current house…
- We like it.
- It’s in a lake community. We have a private beach on a pristine lake in our state. In addition, there is a private beach club at the corner. We also have a couple of small ski areas near us for winter.
- House is big enough to accommodate the family for visits.
Reasons we would leave.
- The house really is way to large just for the two of us...and that’s who is here most of the time.
- Location is semi rural, and we like that...but it does require driving to everything...except the lake.
- Master bedroom and bath are on the second floor. Not an issue now and we like going up and down...but it could be someday.
As part of our renovations, we widened hallways, installed en suite showers, etc., so that if we couldn’t deal with the stairs to the 3rd floor master suite, we could move downstairs and, if necessary, install a caregiver in the master suite.
Seems like the daily stair climbing may give automatic exercise that can help avoid or delay disability.
A two year lag can be huge in a hot market. Regardless, there is absolutely no way that the Assessor knows the true market value of your house that you might have owned for 20+ years and have spent big bucks remodeling (stuff that does not require a permit). Alternatively, in this OP’s case, the house is in dis-repair and the Assessor is unlikely to know that either.
At best, the Assessor can assess your house based on average sales prices in your neighborhood. (What happens if few transactions occur in your 'hood every year?) Your house value is +/- the average, depending on how well it is kept up.
The markets here aren’t crazy hot right now. My former town, with about 12,000 residents, had something like 4 full time employees working in the assessors department. They regularly conduct interior inspections of all the properties in town.
It’s difficult here to spend big bucks on unpermitted renovations, and they are quick to reassess when you do do renovations.
And they tend to be on the conservative side so that half the town doesn’t appeal their assessment every year. They have no real incentive to overvalue properties because it makes no difference in the town’s revenue anyway.
So given that the law mandates full market value assessments, it is still unusual to get a sale under the assessed value. The last time this was an issue was when the real estate market collapsed in 2008, and even then stuff in the desirable towns didn’t drop that much. It didn’t happen in my neighborhood in the 27 years I lived there.
YMMV depending on where you live, of course.
Not necessarily. I bike and/or exercise daily. But I’ve had to have knee surgery and my knees do NOT like going up and down those stairs every day. It hurts, even though biking does not hurt. We’ve been in this house for 7 years, and I’m not going to age out here, even though it has an elevator.
We just put a house under contract - the master is down. I’m happy.
There’s definitely an exercise component to having to go up and down steps, but I think planning for one floor living is prudent. That’s what we’ve done.
Sounds like a fun (but perhaps challenging) renovation. Any chance you could convert bedrooms to studio and keep the garage?
@Nrdsb4 , wait - I thought you had already bought ?
@shawbridge
can you do as coralbrook does and post current house photos on Flicker so we can see what the hoped for remodeling might entail?Especially photos of the strange kitchen?which cost more/sq ft to remodel than any other part of a remodel-short of gutting an entire house and starting over that is…
@shawbridge How does this new house compare to your traditional living situation in terms of density/rural/urbanness ? Reason I ask is friends of ours carried out their dream of moving to 10 acres after raising kids in suburbia. They built a beautiful big new house, and their 10 acres is actually very well located in that you can drive to many things in 5 -10 minutes. But, he is feeling very isolated, socially, and having second thoughts. The isolation is compounded by retirement, ie simultaneously losing the company of work colleagues on a daily basis and also losing the proximity of neighbors. Sometimes when your fantasy (dream house) becomes reality the reality isn’t as great as the fantasy.
I do think you have time for some of the renovations @shawbridge - it sounds like it will work for many things…most immediate is getting the art studio space renovation done. One can think and plan on some of the other spaces and do those in increments. However as you say, the home inspection will be key on what needs attention and if this will change the deal. But it sounds exciting!
@dragonmom, we did buy a lot that we were intending to build a house on. DH recently told me that he just didn’t have it in him to go through that again (would be our 3rd time). A house that we have had our eye on for months recently did a price reduction, so we are going to buy it and just have a little remodeling to do.
You have a good memory!
My husband thinks it would be fun to build another house. I’m totally not on board with this! I wouldn’t mind redecorating…or getting to choose flooring and appliances…but making all those building choices again…no thank you!
@thumper1 , yes, redoing a house already in place is much easier in terms of brain damage, haha. Most of the stuff that we need to do is cosmetic, so yes, picking out colors, appliances, flooring, etc., will be the kind of thing I really enjoy doing.
The house doesn’t need much in terms of repairs or see. Most everything is in excellent shape. It is more making it suitable for a (probably more current) entertaining/living lifestyle.