Everything to Know About Purchasing a Fixer Upper Home

Binge-watching home improvement TV shows can leave you with the impression that buying a fixer-upper is a great opportunity — and it is! Purchasing a fixer-upper home can provide a shortcut to homeownership for first-time homebuyers, and provide an opportunity to earn sweat equity in your property.

 

With a relatively low inventory of homes for sale these days, a move-in ready home can be hard to find, especially if you have budget restrictions. Continue reading to learn more about the benefits of purchasing a fixer-upper home, so you can make the best decision for yourself and your family. 

 

Fixer-upper homes are available to buyers at a lower purchase price because they require major maintenance work. These properties are usually older but have all the potential to be brought back to life. 

 

If you love antique homes and don’t mind getting your hands a little dirty, you may benefit from a fixer-upper. Buyers value this option because you get more home for your money, and even have the option to flip it to make a profit (just like our favorite HGTV stars)!

 

Learn More: Answers to 9 Questions From First-Time Homebuyers

 

Not all fixer-uppers are created equal, and before the term became an entire television network, the connotation of a fixer-upper was very different. Before you begin your search for a fixer-upper, you should be aware of the different conditions they may come in. Here are four types of fixer-upper homes: 

 

Older, well-kept homes are the perfect foundation for renovation and restoration. Buying these types of fixer-upper homes is popular among investors, as they typically only require cosmetic repairs with little to no construction. However, it’s important to note that these types of homes are few and far between, so you’ll have to search for them. 

 

Sometimes renters cause extensive damage to the properties they inhabit. This is especially true if the home was leased by multiple tenants throughout an extended period. These types of homes could need several repairs — including electrical, plumbing, and cosmetic fixes.

 

A clutter palace is a property that a homeowner has overfilled with excessive personal items. 

 

This type of living situation often creates cramped conditions, as the home may be filled with only narrow pathways winding through stacks of clutter. Despite walking into this home, you can’t see the space because there is so much clutter! Too much furniture, and well, stuff — everywhere!

 

Depending on the severity of the situation, these properties may result in mold growth, biohazards, deferred maintenance, and pose health hazards for those who enter. These properties require a considerable amount of money, time, and effort to turn a profit, but when finished, can have a great return on investment. 

 

In an abandoned fixer-upper, repairs to its structure and systems may be necessary to make the home habitable or comfortable. You will likely need to address repairs to major systems like plumbing, heating, and roofing, or issues with the foundation and roof — which are time-consuming and costly. However, if done correctly, these types of repairs can provide the most amazing before and after! 

 

Buying a fixer-upper is a tradeoff. It takes time and effort for you to find a house that meets your needs at a budget you can afford. Before beginning a fixer-upper journey, buyers must first weigh out the pros and cons:

 

 

• Budget-friendly purchase price: fixer-uppers cost less per square foot than move-in ready homes due to their condition
• Less competition: fewer homeowners are interested in fixer-upper homes, however, you may need to compete with investors 
• Ability to customize: when you renovate, you can make your forever home just the way you want it

 

 

• Expensive repairs and renovations: when taking on a fixer-upper project, buyers typically spend up to 10 percent of the home’s value, or around $30,000, or more.
• Extended timelines: the necessary home renovations can take months or even years
• Financing options are limited: traditional mortgages typically don’t cover renovation costs, which may push homeowners to complete renovations in phases
• They require a lot more work than it seems: budget challenges, longer-than-expected timelines, and other difficulties complicate the renovation process

 

The first step to buying a home starts with consulting a local real estate agent. Working with a real estate agent provides you with a better understanding of your area’s market while helping you meet your buyer objectives and stay within your budget. 

 

Consulting with a real estate agent will ultimately help streamline your home-buying process. After all, a fixer-upper home is almost always more complicated than you originally thought. For example, you must make sure to get a thorough inspection, understand the scope of the necessary renovations, get an accurate estimate of renovation costs, and consider your budget along the way. Although this list seems lengthy, don’t fret — your local agent will help you navigate through the entire process with ease, and provide you with the tools and support needed to make your real estate journey easier!

 

It’s called a fixer-upper for a reason — old pipes, outdated appliances, and a leaky roof could result in a handful of necessary fixes — and repair bills. If you’re handy and love DIY projects, restoring an old home to its former glory could be the perfect project for you. However, if you don’t consider yourself a hands-on type of buyer, you can easily hire a remodeling contractor to help begin your renovation. 

 

While there are challenges that come with finding and ultimately purchasing a fixer-upper home, choosing the best real estate agent is the key to helping you avoid roadblocks. From finding your project home to negotiating the best terms possible for you, your real estate agent will assist you through every step of the buying process! 

 

If you’re ready to begin the buying process, click the button below to get in touch with a member of our team today!