Numerous reality television shows spotlighting renovation nightmares have popped up in recent years, and some are questioning their impact on potential homebuyers.
Displaying the ugly side of buying a beautiful home, several of the shows were highlighted in a recent article published in the New York Times that addressed the shows’ impact.
“Forget what the economists say; it’s obvious that the housing market’s plunge in recent years parallels the proliferation of shows whose main message is that only an idiot would buy a house,” wrote Neil Gezlinger. “Would-be homebuyers don’t need to watch many of these shows before reaching a few conclusions that will make them renters for life.”
The problem with most of these reality TV shows is they personify Murphy’s law – that everything that can go wrong when buying a home will go wrong, and potential homebuyers must be prepared to see thousands of their hard earned cash literally disappear in the blink of an eye. This happens on shows like “Homes Inspection” on HGTV, where contractor Mike Holmes comes to inspect the homes of unlucky owners and tell them that he must gut their whole house.
Gezlinger’s advice is to “pray this guy never stops by your place for a visit. He’ll notice some flaking paint on a shutter, and the next thing you know, he’ll be ordering up the kinds of repairs that can be paid for only by selling all of your stocks, cars and children.”
Another HGTV show is “Property Brothers,” where real estate agent Drew and inspector Jonathan Scott help homebuyers find houses that are in less-than-perfect condition and renovate them. The home owners usually end up spending a lot more money than they had hoped.
What is being called “possibly the worst” of these shows is “Flipped Man.” Brothers Russell and Shawn Hantz find and buy properties that are in bad condition in the Houston area and flip them for a profit. Once the brothers find a property they want, the nightmare begins.
To make things worst, homebuyers who do not have their homes inspected usually get unpleasant surprises later, from $8,000 in plumbing repair to to $7,000 in stolen pipes from a swimming pool.
“That’s the kind of thing that can make a prospective house buyer decide that raising two kids in a cramped one-bedroom apartment isn’t so bad after all,” wrote Gezlinger.
Interestingly, local agents that we talked with did not share Gezlinger’s skepticism on the influence of renovation programs. Brian Guzman, for instance, a sales associates with Coldwell Banker Lakeview, said that with how ideal with homebuying market is right now, any kind of home repair should do little to dissuade potential homebuyers from pursuing a property.
“With interest rates where they are and prices still historically low, home repair and home maintenance should never be a reason to hold off home ownership,” Guzman said.
To compensate, Guzman said he is as clear as he can be during the consultation process to adequately prepare buyers for the properties in question.
“During buyer interviews, I explain the homebuying process to potential purchasers and gauge where they are as far as expectations and what they are comfortable with,” he said. “Many times, they will flat out say, ‘I’m not looking to do any work or I can do some work if the work is going to add up to additional equity.’ Homebuyers should understand that there are options of warranties as well as a home inspection contingency to investigate future home repair and updates…The bigger concern should be the fact that they will lose over 10 percent of purchasing power as the interest rates rise from 4 percent to 5 percent.”
Vince Milito, a sales associate at Coldwell Banker Lincoln Park Plaza who specializes in renovations, also disagreed with the notion that renovation programs could convince buyers to avoid homes and instead embrace the rental market.
“There has never been a better time for a homeowner to build value,” Milito said. “[Those shows] are sensationalism at its worst. They’re discouraging homeownership.”
Ultimately, Milito said the onus is on the agent to recognize, as he put it, that a home still have “good bones,” meaning, a sound foundation despite its ragged appearance. Though a home may look as though it requires extensive renovation, with minor adjustments to the home’s appearance – say, cleaning, painting, and maybe affordable carpeting and windows in select areas – the home can be utterly transformed, and without the extensive work the aforementioned reality programs deal with.
Milito also said he disagrees with the TV programs on philosophical grounds, seeing them as “doom and gloom” programs that exploit the fear that has been lingering in the real estate markets since 2008. For Milito, the market is the best it’s been in years.
“The Chicago market has been doing awesome,” he said. “My office’s volume is 50 percent above 2011.”