Q: I am thinking about purchasing a house built in 1909, and I would like some advice.
The house is structurally sound, has very sturdy oak floors and solid walls. The roof is only about 7 years old and still in good condition. There is a bit of old water damage on the ceilings, but they are more cosmetically ugly than anything else. The wiring is up to date, but the plumbing is in bad condition.
The house has six bedrooms, two bathrooms, two living rooms (both with fireplaces), a sunroom, kitchen, and dinning room, along with a partial basement and a full attic with a tall ceiling. The owners are asking $70,000. Does this sound like a good purchase?
A: I have no way of knowing whether this house is listed correctly at $70,000. Depending on where the house is located, it could be a fabulous bargain or ridiculously overpriced.
You also have to consider what problems you’re having with the plumbing. If you have to dig an new sewer line to the street, build a new septic field, or replace all of the plumbing in the house, you could be talking about spending anywhere from $20,000 to $100,000.
You also don’t mention how much, if any, land comes with the property. Do you get 10 acres or is it on a tiny city garden lot?
The best way to know whether this house, or any house, is worth the price is to look at what comparable homes in the area have sold for in the past three months. If no homes have sold, then you should look back to sales within the past six months. If you look for sales comps any further back than that, you risk comparing your property unfairly to sales that were closed before the current housing crisis.
Once you do a thorough exploration of the local marketplace, you’ll be able to tell whether you’re being offered the bargain of a lifetime, a good deal, or something that you should pass on.