The Buying Process of a Fixer-Upper Home
When you’re faced with the decision of buying a fixer-upper home, there are a few aspects to think about, such as DIY home projects and renovations, researching financing and permits costs, and hiring a home inspector. It’s also good to set aside how much money and time you can invest in such renovations, as well as researching the location of the fixer-upper home (such as the neighborhood and proximity to shops and restaurants). Here’s a quick guide on buying a fixer-upper home.
Inspect the Home
Before you factor in things like budget and time, you’ll want to first see what kind of renovations the fixer-upper needs. Inspect the home for things like:
● Broken windows
● Paint makeovers
● Adding trim on baseboards
● Installing new light fixtures
● Refinishing floors or replacing the carpet
● Adding new concrete for driveways
● Replacing sewer lines
● Kitchen and bathroom remodels
This is also a good time to bring in a home inspector, who will take a look at structural issues and any necessary remodeling that needs to be done.
Prioritize Home Renovations
To prioritize which projects need to be done first, consider the following:
● Repairing expensive, time-sensitive and necessary structures first (such as shoring up foundations and building garages)
● Repairing or replacing items that will lower water and energy consumption
● Adding in low-cost renovations (such as painting or wallpapering)
Some projects will also require the use of various high-quality tools and equipment, such as drills, sanders and jigsaws. Example of such renovations that may involve using these tools include:
● Drilling in screws for doors and cabinets (drills)
● Restoring furniture (sanders)
● Making desks, shelves and other woodworking projects (jigsaws)
Check Various Pricing Aspects
Aside from renovation costs, it’s important to consider a few pricing and cost aspects of a fixer-upper home, such as:
● Financing
○ Obtain a home-improvement or home equity loan for making home repairs
○ Consider the 203(k) program offered by the Federal Housing Administration
● Permit costs
○ Some renovations may require a permit, depending on where the home is located
○ This may be a time-consuming and rigorous process
● Fair purchase offer
○ This involves subtracting the upgrade and repair costs from the fair market value of your property
○ It may be a good idea to share this information with potential sellers
Searching for Fixer-Upper Homes in Your Area
Finding a fixer-upper home is easy thanks to the variety of online real estate resources available. These websites often involve simply typing in an address or city and searching through various home listings. Information that is often presented in listings includes:
● Price of the home (for example, the average listing price for a fixer-upper home in Durham, NC, is $300,000)
● Number of bedrooms and bathrooms
● Square footage
● Exact address
● Type of home
You can also discuss your options with a real estate agent, which you can find through referrals, neighborhood signs and open houses.
Post-Renovations: Should You Stay or Sell Your Home?
After you are finished making any necessary renovations, you may be wondering if it’s worth selling or staying in your home. Here are some ways to decide if you should stay or sell your home.
You should sell your home if:
● Your home is too small or large for you or for your family
● You can flip it for a large markup
● You want to downsize for an easier lifestyle change
You should stay in your home if:
● You can’t find your ideal home yet
● Proximity to work, school and shopping centers is ideal
● You live in a growing city, which will offer a future markup on surrounding homes
A fixer-upper home may be the perfect option if you have the money and time to set aside for it. It’s also important to consider a proper home inspection, home renovations and various pricing aspects before deciding if this is the right option for you. For more information, consult a real estate agent, online resources and referrals.
By: Bret Engle
Photo Credit: Pixabay.com