Buying A Fixer Upper

Buying a home that needs some TLC to get it shining again can be a great way to get more house for less; however, you’ll need to be willing to roll up your sleeves and get to work.

It’s also extra-important that you make the right decisions with a fixer-upper home, because the wrong home purchase can lead to loads of additional money being spent and a ton of headaches.

Below, we’ve put together some tips and questions to help you navigate buying a fixer upper.

Why Do You Want to Purchase a Fixer Upper?

When you have the inclination to purchase fixer upper home instead of a move in ready one, it’s essential to have an understanding of why you’d like to take this route. Some questions to consider could be:

Are you looking to save money by purchasing a home in less-than-great condition? (You may be in for a surprise with home much you’ll end up having to invest!)
Are you looking for an opportunity to customize a home?
Do you enjoy DIY?

Reasons that buyers choose to go this route vary, but it’s important that you remain realistic during this decision also. While renovating an older home or less-than-desirable one into the home of your dreams may sound fabulous, it may not work with your current life situation - it’s a big undertaking!

What Condition is the Home In?

Taking close stock of the entire condition of the home is incredibly important when you’re considering a fixer-upper purchase. Pay attention to the following things when making your decision:

Are there broken windows? These can be costly to replace.
Do you notice leaks around the toilet or bath tubs? This could indicate plumbing problems.
What condition are the floors in? Will they need to be refinished or will carpet need to be taken out and replaced?
What condition are the walls in? Will sheetrock need replacing due to damage and holes? What about painting and wallpaper replacement needs?
What condition is the kitchen in? Will you need to replace/add countertops or cabinets? What about appliances?
Is the HVAC system in good condition? This can be an expensive replacement.
How is the electrical in the home? Does the panel/outlets/wiring need any work or replacement? This can get pricey!
How are the doors? Will they need replacing?
What is the exterior siding/stucco/brick/paint like? How much repair or work will need to be done?
How is the roof? Does it need replacement or do you notice shingles out of place? A new roof is at least a few thousand dollars.
Do you see any noticeable cracks in the concrete, on floors, in walls, or on ceilings? What about tilted door frames? This could indicate an expensive foundational issue.

Do You Have the Money to Renovate?

Barring unforeseen circumstances or extra additions that you’d like added into the home, the average price to remodel a home under 1,000 square feet is $18,347, while the average cost of a 3,000-4,000 square foot home remodel is about $36,121. These prices can get higher or lower depending on the area you live in. It’s important to determine if this is an undertaking you can afford.

Can You Get the Right Loan?

Some lenders have the option of taking out a loan for renovation; the renovation loan can often be piggybacked onto the mortgage of the home purchase. You’ll need to see if your lender can do this loan and if you qualify; qualification terms for these types of loans can be a bit tougher.

How Much Time Do You Have?

Renovating a home can take some time. You’ll need to determine if you plan on living in the home while renovations are taking place, or if you will be residing elsewhere while they are completed. What options do you have for living arrangements during the renovations? You may also need to further consider your options if you have children or other people living with you.

How Much Work Are You Willing to Do Yourself?

As we’ve seen, renovations can be expensive. However, if you are willing or able to do a portion of the work yourself, you can save a decent amount of money on paying contractors to do it for you. Be sure you’re confident in your ability to do something, though, before you take on the project. When it comes to home repairs, mistakes or poorly done work can end up costing you pretty greatly.