Remember “The Money Pit”? You know, the 1986 movie with Tom Hanks and Shelley Long, who purchase a supposed bargain of a mansion, which proceeds to collapse under their feet? Well, it turns out that the real-life house from the film has officially lived up to its reputation, selling for a huge loss.
The backstory: This 14,000-square-foot Colonial, located just outside New York City in the Long Island village of Lattingtown, was used for only the exterior shots—but that doesn’t mean the actual house was in good shape.
Originally built in 1898, the house was purchased in 2002 for $2,125,000 by Christina and Rich Makowsky. While the couple no doubt knew the house was old and had heard of its ties to the infamous film, they figured the home’s flaws were mostly fiction—only to be proved wrong once they moved in.
“We didn’t realize how bad it was,” Rich told the New York Times. “The house was falling apart when you went from room to room. We definitely could have done the sequel.”
What happened to ‘The Money Pit’ house
Undeterred, the Makowskys hired a construction crew of 30 to renovate the house for over a year and a half, spending a total of $5.9 million to add en suite bedrooms, an elegant pool (complete with a pool house), stunning fireplaces, and a modern, open kitchen, all on 5.5 acres of land. So when the Makowskys decided to list the house in 2014, they felt justified in asking for the purchase price of $12.5 million.
Yet there it sat with no buyers, despite numerous price cuts, for five years. At long last, it recently sold for $3.5 million.
With nearly $6 million spent on renovations, plus the home’s $2.1 million price tag, these sellers have sustained a Hollywood-worthy loss. But why?
One famous scene in “The Money Pit” features the staircase collapsing, but this staircase is perfectly intact.
Why ‘The Money Pit’ house sold for a loss
First of all: Did the movie give this home a bad reputation, or was there some other reason it wouldn’t sell?
Jessica Fields, a real estate agent in Brooklyn, NY, theorizes that the owners may have renovated too much, resulting in a home that’s overly lavish for the locale, and the times.
No mansion is complete without a pool, right?
“’The Money Pit’ house selling at a loss has to do with both the size and styling of the house,” says Fields. “Buyers are looking for more casual homes and aren’t as interested in large, formal properties. While the house is certainly beautiful, it’s just not the look that many buyers are shopping for.”
This room is all classic glam.
But style may not be the only reason for the lack of interest. Some experts blame the market as a whole.
“The market dictates the price of the property,” explains Josh Altman, a Los Angeles real estate agent, “and unfortunately for these sellers, this is not the ideal market for them to sell in currently, due to the decline over the past 12 months in the area.”
It’s also possible that buyers were dissuaded not by the home’s price, but by the other fees that went along with it. As Newsday reports, the property taxes on the mansion (and the 5.5 acres of land) amount to a whopping $88,448 a year.
‘It was a very ambitious price’
As “Million Dollar Listing Los Angeles” star James Harris explains, selling a home like this requires a certain amount of finesse.
“Buying a home that needs renovation and turning a profit upon the sale is a delicate dance,” he explains. “It’s all about the numbers. You have to buy it at the right price, put the right amount in and sell it for the right amount. All of that involves timing at each step.”
While buyers may assume that updates and renovations will improve a house, that’s not always the case. Owners could make changes that simply aren’t to buyers’ taste, or they could uncover problems during renovation they didn’t know they had.
“Sometimes renovations simply don’t pay off,” Harris says. “Unfortunately many times a home is purchased at a strong point in the market, renovations are planned, and sometimes when you start opening walls you end up spending more than you budgeted, and it takes longer than expected. Within that time markets can also shift and, unfortunately, that can drastically affect the final selling price.”
Even this home’s listing broker admits the original listing price of $12.5 million was too high.
“It was a very ambitious price at the time,” Lois Kirchenbaum, the home’s broker, told the Daily Mail. Still, it’s “a beautiful home, beautifully done with all-new, high-end appliances.”
Here’s hoping the new owners have better luck with this place than the last ones did.
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Source: Housing Trends Feed