With all the renovation and fix-it and flip-it shows on HGTV, you might begin to wonder if people actually buy fixer-uppers to live in nowadays. Yes, they do and picking the right one could bring a sense of satisfaction for years to come. But how do you know if you have a good fixer-upper or if you should pass? The biggest attraction to fixer-uppers is the price tag and the potential gain after the home renovation. While you can often acquire them at less than market value, sometimes that cheaper price tag comes with a hefty amount of work. Not to mention surprises you may find during the renovation process.
A fixer-upper does not always have to have major renovations however. Sometimes simply remodeling a few of the rooms will have it looking like your dream home in no time. Before you start the serious hunt for a fixer-upper, meet with a trusted lender first and obtain your mortgage pre-approval. Be sure to talk with your lender about possible limitations in financing. It’s best to know if the property you’ve been eyeing qualifies for the loan prior to submitting an offer on it. Both your lender and Realtor® can help you with this process. Once you have an idea on what type of loan program or amount you can qualify for, it’s time to start looking at properties. As with any real estate purchase, you will want an inspection clause in the contract.
Foreclosures although take a lot longer to close, could have the potential to be good fixer-uppers. With these types of properties, most of the interaction needs to occur with the bank rather than dealing with a home seller. Keep in mind that foreclosures may need more repairs than a normal sale. Be sure to have a home inspection. During your home inspection period, hire a credible home inspector to look for structural issues, inspect the plumbing, heating and cooling systems and the property overall.
Depending on whether you are flipping the property or simply renovating it for a home to call your own, it will probably determine how much repair you are willing to complete. Ideally, on a flip you’ll want a home with more cosmetic repairs rather than one that will require structural improvements. Cosmetic repairs can be simple such as a new coat of paint or new doors. Other repairs may require a contractor and permits. Be sure to be present during your home inspection to ask the inspector any questions that come to mind. Depending on the inspection report, you may want to hire additional professionals to inspect anything major that might appear in the original inspection report. You’ll want to be sure the new home you are purchasing is a good investment and not a money pit. Homebuyers often get so excited over the process that they tend to overlook that the fixer-upper could have additional repairs needed once the renovations begin. Finally when deciding on a budget to repair the fixer-upper, be sure to set aside funds for any surprises that may arise during the renovation.
Want to save money on your fixer-upper? Plan to do some of the work yourself. Whether it is as simple as painting the walls or perhaps if you have the skills, installing new cabinetry, you can save a lot of money if you do some of the work yourself. Make sure you price all the costs for the repairs prior to making your offer. If you’ll be using a contractor, be sure to get quotes for all the work you will need completed. With careful planning and budgeting, you might just make a good investment.
If you are thinking of purchasing a home, talk to the lending experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.