What it takes to buy and renovate a fixer-upper house

By the time Elizabeth Randel saw the house in Baldwin, she had bid on others above asking price and lost. Rather than vying for the ideal property, she modified her strategy: Go for a house with potential that she could fix up.

“This was a great fit,” Randel said of the fixer-upper of her dreams, which was listed "as-is" by the seller. The four-bedroom Cape she bought last winter for her extended family had an outdated kitchen and bathrooms, floors that needed refinishing and walls that needed resurfacing. “It’s a really nice neighborhood on a great block," Randel said. "We like it even more than when we just looked at it.”

Randel, who lives in Freeport, closed on the 5,500-square-foot home for $528,000, well above the $499,000 original asking price, and has since done work herself and brought in contractors. Her parents have rented the house from her, and are living there with her grandmother and brother.

“We were looking for a house that would look partly scary to other buyers,” she said. “We were hoping to keep the costs down, since the market is tight.”

In the recent hot market, Randel and many other Long Islanders see fixer-uppers or “as-is” purchases as the path to a dream house, if one is willing to put in money and work.

“Smart buyers realize when a house has good bones, a good location and the spaciousness they need,” said Bonnie Glenn, associate real estate broker at Daniel Gale Sotheby’s International in Smithtown.

Since the pandemic, some fixer-uppers have been generating dozens of offers and crowded open houses just like homes in good condition during a time of low inventory, real estate agents on Long Island said.

And they are confident that fixer-uppers will continue to attract a steady stream of buyers. The number of closed sales on Long Island in the second quarter of this year was 7.4% lower than the same period in 2021, while the number of houses on the market rose by 2.4%, according to real estate appraisal firm Miller Samuel.

“Given the recent peaking or cooling off of the market, there will still be interest and demand for fixer-uppers,” said Denise Kearse, a real estate agent at Weichert Realtors Quality Homes who represented Randel. “The rise in interest rates impacts monthly payments and affordability, so the lower price point for a fixer-upper will still make it attractive to many buyers.”

And sellers may be more willing to make concessions, Kearse said: “The difference will be that the buyers will probably have more negotiation power on price and even some repairs.”

Picture perfect

Jaime Aguilar, an associate real estate broker with Coldwell Banker American Homes, recently went into contract with a Colonial in Merrick that had been on the market for several months.

The listing noted that this five-bedroom house with 2½ bathrooms built in 1948 was being sold as-is. “The homeowner’s not making additional improvements,” Aguilar said.

Some wood flooring was in poor shape, ceilings and drywall were cracked, windows had deteriorated, and the heating system was old. But Aguilar had the sellers make cosmetic improvements, including removing possessions and cleaning floors and counters, and then hired a professional to photograph the house for the listing.

The house listed for $995,000, was reduced to $865,000 and sold for $755,000 last month.

Aguilar and his colleague Sundeep Gill recently spruced up a Colonial in Freeport on behalf of a family member who had inherited the home. They cleared out possessions and hired a cleaning service, but didn’t paint.

“Everything is curb appeal,” Aguilar said. “We got landscapers to come in, prune the bushes, cut the grass, clean out leaves.”

Despite scuffed flooring, walls in need of repair and an old kitchen and bathrooms, it had selling points, such as the kitchen being roomy, a walk-up attic, finished basement, detached garage and rear deck. The house went into contract at roughly its asking price of $599,000 after getting multiple offers, Aguilar said.

“They liked the location, a beautiful block. They liked the size of the rooms,” Aguilar said of the buyers. “The dining room is the size of a principal bedroom.”

A way in

Fixer-uppers can let buyers enter the market in an area they might not otherwise have been able to afford.

A three-bedroom, one-bathroom ranch in Bridgehampton near houses selling above $1 million had rot around doors, less-than-ideal basement steps and a bathroom with no fan in need of grout and caulking.

“It was in a little bit of a rough condition,” said the listing agent, Ryan Braswell, broker owner of Local Realty in Bohemia. The market has been strong enough that sellers don’t have to acquiesce to buyers’ requests to do repairs, Braswell said.

While they cleaned the house, they indicated it was take it or leave it. “We had people come in and say, ‘We’ll take it in the current condition,’ ” Braswell said.

Although flippers wanted to tear down the house, the buyer plans to renovate, possibly adding an extension in an area that can sustain higher prices. “There are three nearly new constructions nearby close to $1.7 million to $2 million,” Braswell said.

Anne Kerr and Dana Hansen, real estate salespeople at Daniel Gale Sotheby’s International Realty, had no trouble finding offers for a 1958, 3,200-square-foot brick French provincial house with four bedrooms and 2½ bathrooms in Muttontown that needed work. It listed for $999,999 and sold for $1.5 million.

“In my 36 years in the business, I have never experienced such a frenzy,” Kerr said. “People seemed to come out of nowhere. Sixty-plus offers. It was unbelievable.”

Hansen said the deal gave the buyers entree into the area. “It was the perfect storm between low inventory and price,” she said. “You can get into a desirable neighborhood at a lower price, but you have to put in the work and the money.”

There were more than 150 showings in about a week, despite original bathrooms, windows needing work and a back door that didn’t close perfectly.

While some bidders wanted to tear down the house, the buyer, who paid $1.5 million, plans to renovate. “They’re going to make it beautiful again and live in it,” Hansen said. “The neighbors were happy. They were worried someone would come and tear it down.”

Buying as an investment

A three-bedroom, 1½ bathroom farmhouse built in 1890 on a ½-acre in Center Moriches had history, but hadn’t been updated in decades.

“It’s never been out of the immediate family,” said Victoria Swenson, associate broker at Moriches Bay Real Estate in Center Moriches. “It has great bones, amazing flooring; it’s very sound.”

Swenson had a team empty belongings from the house, being sold by an estate, and clean, but leaks remained. “The only things modern in that house were the cellphones and the TV,” she said.

Tim Monahan, owner of Center Moriches-based Top Tk Construction, made several bids on the house listed as “needs TLC and can be restored to its original beauty.” “I liked the old style and the pricing,” he said.

The roughly 2,100-square-foot house, which includes a barn in the back, closed in the spring for $350,000, below the $420,000 asking price, and ended up going to two attorneys who bought it as an investment.

Taking the long view

In Baldwin, Elizabeth Randel is happy with her decision to buy the 1949 four-bedroom fixer-upper for her extended family.

She expects to be working on it for several years, starting with resolving issues connected to work done by prior owners without permits, then moving on to renovating the kitchen and bathrooms, painting walls and replacing doors.

Randel has ripped out carpets, refinished floors, resurfaced walls and the fireplace in the living room. She did a “sham” renovation in the kitchen until she can do a major overhaul, removing scalloped trim and installing a used stove for temporary use.

While she is replacing some appliances, Randel is touching up others. “The refrigerator had paint coming off. I bought a bottle of appliance touch-up paint,” she said. “Now you can’t even tell.”

Randel believes the work could easily end up costing $100,000, but she and her family (her father ran a construction company) plan to do much of it themselves.

“There’s still a lot to do,” Randel said. “But that’s what led us to this property.”