Deferred maintenance is the deal of a lifetime for an open minded buyer.
All great deals come at somebody’s expense though – the expense of the seller in this situation.
One thing I see quite frequently are burnt out AC Condenser compressor units. These are very easily maintained. They require is a quick visual inspection to see if the condenser is plugged with debris and an inexpensive pressure test every couple years by an HVAC mechanic.
When neglected the $2,000 (give or take) condenser compressor unit burns out.
Neglected repairs will eat away your equity
The last home I sold with a defective condenser compressor unit closed at $10,000 under appraisal value in a rising market!
Luckily I was representing the buyer on the deal of a lifetime! I have represented seller’s in this situation as well, we made sure to figure out a fix instead of passing along a discount.
Why so much lost equity?
First, buyers are looking to move not to take on repair projects. Banks are also very reluctant to allow anyone a loan on a property needing structural or mechanical repairs. This leaves the sale to cash only buyers and investors who are looking to do home renovations.
I have been seeing a lot of homes with deferred maintenance lately. I totally understand why home owners are putting off their maintenance. Property values have fallen so far that many individuals have lost all their home equity. They see no value in maintaining an investment that’s worth zip, zero, zilch.
Keeping a head of a down Real Estate market
Let me share a quick story with you. Back in 2007 I worked my tail off researching a stock investment. I poured savings into my no brainier investment, Kong Zhong a chinese mobile communications company. The next day news was released that there was a bubble in the Chinese stock market. I immediately lost half the value of my investment!
Everybody is at the mercy of markets be it, stock markets, or real estate markets. However, unlike many investments you can have a positive impact on your real estate. Regular maintenance will protect your equity and make your next move easier.
Markets are cyclic and what goes down comes back UP. We are seeing property values on the rise right now and owners who deferred their maintenance are getting left behind. I have spoke with several people who had blown out AC compressors like in my example. They were forced to foreclose because needed repair made them upside down on their home loan (owed more than the value of the home) – except for the individuals who worked with me will explain later.
Protect the value of your home with this maintenance schedule
The last thing you want to think about when you come home from a hard days work is home maintenance.
Keeping a regular maintenance schedule protects your equity for when you sell but also saves you time and money. Back to the AC example. Regular maintenance of your HVAC will reduce your electric bills! This means your money will go farther and you can put in less time at work.
I created this maintenance schedule for you. Print if off. Sticky it to your fridge and each month follow the maintenance tasks.
Looking to sell a home in need of a little extra attention?
This is where a good real estate agent can really shine. I have helped clients on both the buy and sell side with repair complications.
Sometimes it means taking out a payment plan with the AC guy to complete repairs before you sell. Or it can be as simple as knowing the most affordable plumber to rebuild your hot water heater.
Every situation is unique. Figuring these deals out requires a detailed knowledge of market conditions, real estate contracts, bank practices, and construction costs.