Buying a Fixer Upper?

I often receive inquiries from home buyers who are in the early stages of their house hunt in the New Jersey suburbs. They want a comfortable modern home that is suited to their taste and how they live and they know that they will probably need to do a renovation to get it. One of the first questions they ask me is how much it will cost to do a home renovation project? Then, if they’ve already identified several potential properties, they ask which ones are best suited to be transformed into their personal dream home. The answers to these questions are usually fairly involved; we need to explore the clients’ expectations along with the numerous variables of the properties they are considering.

I’ve published a guide that provides some direction on the cost question, particularly for full house renovations in the New Jersey area. Each project and scope of work is unique and which house is the best candidate requires a thorough inquiry. If an addition is part of the project, what are the zoning limitations of the site? Does an addition make sense as it connects to the right part of the house?

Oftentimes a couple has a common goal in their pursuit of a new house, but different tastes and priorities. It’s my job do dig into their preferences and present a resolution that gives everyone what’s most important to them.

CASE STUDY: Design Dreams vs. House Hunting Reality

After living in a condo in Hoboken for several years, Mike and Renee were ready to buy their first house. They knew what part of New Jersey they wanted to live in, that they wanted a modern home, and they were enthusiastic about doing a renovation project to get their dream house. They had just started researching properties when they called me to discuss how I could help them figure out their best option. During our initial phone call, I was able to get a sense of their priorities and, more importantly, establish that they had a realistic expectation of what it would cost to achieve their goals. We set up an in-person meeting at my office and they sent me listings of the two properties they were most interested in considering. There weren’t many properties available in their location that were suitable and in need of the full renovation they desired, so options were limited and the two homes they sent were very different styles.

One was a mid-century ranch house that needed a lot of updating. The property was large and included a pool and tennis court. The other was a two story brick center hall house that wasn’t an obvious choice for a modern-looking transformation, but offered other features that they liked. As I looked over the listings, I was naturally drawn to the ranch as I knew it had the potential to be a great modern house. The more traditional house was quite similar to a project I’d done several years ago; in fact, the front was almost identical. In that renovation, we didn’t try to make the house something it wasn’t. Instead, we created a fresher, more stylish look for the front by making changes to window styles, the front door, and other minor details. The interior was also given a more modern style that still felt right within the shell of the original house. The real transformation was the back of the house where we designed a modern addition that still blended well with the original design. I could easily see the same sort of success for the center hall house that Mike and Renee were considering. All that being said, I was well prepared to discuss the potential of both options with the couple.

When we met in my office, I asked questions that gave me a better understanding of what they each felt was most important to them, both individually and as a couple. While they both wanted to buy a home in the New Jersey suburbs, Mike dreamt of a very modern house, open and bright. He preferred the ranch house and was having a hard time seeing the potential of the more traditional brick house. The more we talked, it was revealed that Renee really didn’t like the ranch house at all, and was having an equally hard time imagining herself in that house. At one point she said she “hated” ranches. They both agreed they didn’t want a pool and tennis court, so the ranch purchase would have meant paying for amenities that they’d likely demolish rather than deal with the upkeep.

We started to make a plan for me to tour both houses with them to further assess their potential, but I realized that Renee would never be happy in a house the style of which she hated. The pool and tennis court issue turned out to be an important factor when practical matters were included in the mix. Additionally, the ranch house had a substantially higher listing price than the brick house. I was able to make Mike understand that starting with a property his wife so strongly disliked wasn’t a good starting point. Our conversation allowed her to express this dislike in a way she hadn’t when they initially narrowed their search to include that house.

I did my best to explain to Mike how I could approach making the brick house work for him and suggested we just go look at that house. He finally agreed that it would be a waste of time to pursue the ranch house.

After touring the house, we went for coffee to talk further. In the initial meeting, I had given deference to Renee’s house preference. Since Renee liked the brick house for a variety reasons, in this discussion I focused on laying out a vision for Mike of how we could transform this house in a way that he could come to love it. He started to get noticeably excited and brought up some ideas that showed his “romantic” side. We ended the meeting with them prepared to make an offer on the brick house. Unfortunately, the seller wouldn’t agree to anything less than the asking price which we felt was too high given the condition of the house and the fact that it had been sitting on the market a long time. The seller ultimately took the house off the market all together.

So, while the house search continues for Mike and Renee, I truly believe that they got a lot of value from the pre-purchase consultation process. They now have a better handle on each other’s tastes and desires and what it will take to create the modern dream home they are envisioning.

An Honest Approach to Renovation Costs

The more difficult scenario is when a client has unrealistic expectations of what it will cost to meet their goals for a given property. It is especially unfortunate when they’ve already purchased the house before they call me and then discover that they can’t afford to do the renovations and/or additions needed for what they had in mind. In this situation, how honest is too honest? I’m always upfront about the reality of a project, even if it costs me the job. There will always be someone willing to tell clients, of course we can do the project for your budget, it just isn’t me.

In my past experience, I’ve had quite a few situations where I started a project with a budget, knowing it would be tight, but agreed with the client that we’d do the design and see where it took us. I would start the design with their budget in mind, but once they saw how the house could be transformed, they would often add other elements and go for more costly solutions. When numbers started coming in, there were moments of panic and lots of discussion. To be honest, most of the time the clients went ahead and spent what it took to get what they wanted. In the end, they were thrilled with the results and glad that they had followed through. I suspect if they had known the final number in the beginning, they either wouldn’t have done the project or they would have hired someone who would promise the impossible and really been blindsided when the numbers came in.

Wondering when it might be worth it to spend increase the budget? Here are what I believe to be a few key predictors for my clients:

• Location, location, location: Is the house in a neighborhood that justifies the larger expense, even if it doesn’t directly translate into immediate resale value?
• This must be the place: Is the property so desirable — either for it’s location, the land, or other personal reasons — that there really aren’t any better alternatives?
• The long haul: Do they plan to stay in the house for a long time (more than 15 years), making resale value less of an immediate concern?
• Budget concerns: Is their initial budget a true reflection of their available finances? Or is the fear of creating a home that will be overpriced for the neighborhood preventing them from allocating more funds to the project?
• The driving force: Is good design and quality construction a primary driver in their decision to undertake this type of a project?

If I sense that these predictors are not going to be relevant, and the client’s budget is not close to what I believe needs to be spent to achieve the desired outcome, I’d rather be completely honest than enter a situation that will disappoint everyone involved. I’m not an architect who does cheap projects just to get them done; there is a quality threshold I’m not willing to compromise on in terms of design and construction methods. Most important, if the client also cares about good design and quality work — and their budget isn’t completely out of line — then I know there’s a workable solution to be had. It might involve finding ways to help them reduce the scope of what they want, or it might mean dazzling them enough with the vision of their house that they see why it’s worth the investment.

Pre-purchase Consultations

Buying a house with the intention to renovate to create a custom home is a big emotional and financial commitment. Want to avoid entering a home buying situation you’ll later regret? My pre purchase services will open your eyes to the potential of a property that you may not be able to visualize on your own. Let’s talk. I’ll get to know your needs, desires, and get a sense of what will work for you — both financially and aesthetically. This small upfront investment can provide great rewards.

A Review From One of Our Pre-Purchase Consultation Clients:

Gary guided us through a gut renovation of an entire house. We were looking for a comfortable modern style home that fit in with our more traditional neighborhood. He was with us from start to finish. He helped us select a property, created the design and the plans. Advised us on decor and accessories and checked in with the builders throughout the project to make sure work was being done properly and helping to troubleshoot issues that arose. Gary was an absolute pleasure to work with. He listened carefully to all of our needs and incorporated our feedback throughout the project. His taste is impeccable and his designs were creative and sleek. He made what could have been an overwhelming project, feel fun and manageable. We are thrilled with the final project and would recommend him without reservation!

DABPEARL Short HIlls, NJ