How to Calculate Offer Price for a House in Need of Work/Repair

Are you planning to buy a Boston condo that needs work?

In the  Boston condo world, this is probably one of the easiest ways to own a property without paying a lot. That is, if you can manage to make an offer that will factor in the appropriate cost for every remodeling work required.

Construction of new Boston high rise condos might have increased, according to a 2018 report in Fortune, but people continue to buy existing properties, including fixer-uppers.

If you plan to do the same, make sure to offer a price that takes into account the cost of renovation. How do you do this exactly?

It is important to understand the types of properties that need work and how their prices are calculated.

  • Fixer-upper homes

Sold as-is, these Boston condos for sale are often priced based on comparable sales minus the estimates for repairs. These home typically are priced well below market rate to cause a bidding war in order to get the best offer.

  • Foreclosure Boston condos

Even when sold as is, similar to a fixer-upper, you are unlikely to get a discount off the asking price. Bank owned properties are usually reluctant to lower the asking price. And in today’s market they are hard to find.

  • Short sale house

Buying such a Boston condo is a complicated process. A short sale happens because a seller can no longer afford to make mortgage payments which means they can’t also pay for repairs when required. On top of these, lenders are unlikely to cooperate unless the price is in line with the real estate market.

Newer but outdated properties

Would you pay top-of-market if the Boston high rise condo requires upgrades? Unlikely. You can ask for a discount based on the cost of home improvement.

How to Calculate an Offer to a House That Needs Work

Seek professional real estate advice

Hiring an experienced real estate agent remains the easiest and safest way to ensure that you pay the right price for a property. After all, we have the industry knowledge and market connections to provide you the essential information.  Have your real estate agent conduct a comparative market analysis to gather data on sale prices of comparable properties that have recently sold and are located within proximity to the condominiums you want to purchase.

Hire a building contractor

If realtors can provide comparable property prices, building contractors can provide you an estimated cost of a condo’s remodeling work. They can estimate the cost of building materials and the man hours needed to complete a renovation project.

If you plan to repair the Boston condo by yourself, you still need to calculate the possible costs you’ll incur. If you lack comprehensive knowledge of the construction market, refer to building contractors just the same.

Consider the extras

For major work you might need to hire a structural engineer, architect, and get building permits. It is important to take them into account when determining your purchase price.  I can recommend contractors that can help keep your cost down.  

Inspections

The buyer should have a general building inspection and a pest inspection. Based on the findings during the inspection the seller might make repairs or give the buyer a credit.  A house that is sold in “As Is” condition means the buyer needs to account for the cost of repairs in their purchase price.

Work out the details

With the data from your real estate agent and the estimated cost from your building contractor, you can then calculate how much to offer a property in need of repairs. 

You should also deduct the cost of extras. From the result, make adjustments for contingencies, such as project delays due to bad weather and fluctuation in the price of building materials.

Now that you know what to do, start shopping for properties in need of work. Make sure to consult with a local real estate agent or contact Ford Realty if you are in the market for buying a Boston high rise condo

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How to Calculate Offer Price for a condo in Need of Work/Repair?

Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

AREAS COVERED

Back Bay

Beacon Hill

Charles River Park

Downtown/Midtown

North End

South End

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Surrounding Communities of Boston
Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

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