Should I Buy A Fixer Upper?

With low housing inventory and escalating prices, some home buyers are turning to fixer uppers. If you are the kind of buyer who brims with excitement over the so-ugly-but-has-lots-of-potential home, a fixer upper might be right for you. But beware, buying a fixer upper is not for the faint of heart! Not only does it take a lot of vision, but it takes a lot of money, time, and effort. 

1) See the potential. Some buyers walk into a home and can imagine what it could be, while others can’t see past the pink bathroom tiles and olive green carpet. If you are visionary, still keep in mind the features that make a home worth the trouble. The “bones” of the house need to work for you as well as these important elements:

Desirable location

Size of the lot/yard

Amount of square footage

Layout of rooms/functional layout

Number of bedrooms and bathrooms

2) Count the cost. First, make a list of everything that needs to be addressed. Determine what work you can do yourself. Things like painting, installing new light fixtures, ripping out old flooring, or even refinishing wood floors may be in your skill set. Then, what jobs do you need to hire a professional for? Things like electrical and plumbing, roofing, and heating/air conditioning will need to be handled by a professional. If work permits are required, find a reputable contractor to work with. Get quotes on all the work. Add costs to your list and build in a 20% buffer. Also keep in mind where you will live during the renovation and if you will need to pay for secondary housing.

3) Don’t over improve. Things like taking down or moving walls, putting on additions, or other structural work are high cost items. A five-car garage or spa bathroom may be desirable to you but not to other buyers. Keep in mind the value of other homes in the neighborhood. Don’t try to make a Cadillac out of a minivan. Depending on how many years you plan to live in the home, you may not get your money out of it if you add too many bells and whistles. Over improvements don’t always pay out in the end.

4) Fund your projects. Paying for a fixer upper can be challenging on many levels. First, if the property is in poor condition, and the seller will not make any repairs, you may not find a lender willing to finance the purchase. Secondly, once you own the home, now you have to complete all the renovations. Will you have the cash, be able take out a home equity loan/line of credit, or get a personal loan? There are some home loans, such as FHA 203(k), that cover both the purchase price and costs of renovations in the loan. However, work must be completed by a licensed professional and there are deadlines for completion. Before tackling a fixer upper, check into your financing options.

5) Plan to stay. Once you pour all this money into your home, plan to stay long term. Unless you found a home for an absolute steal, most likely you will need at least 5-10 years to recoup your investment, depending on the cost of your improvements. Simple things like fresh paint and flooring are quickly recouped. The return on total kitchen and bathroom remodels, however, can take longer. As property values increase over time, and you build equity, you will gain a return on your investment. 

There are many variables when it comes to buying a fixer upper. Talk to your real estate professional to discuss this option and see if it could be right for you.

YOU MIGHT ALSO ENJOY

Receiving Offers On Your Home

You got your home ready, worked with your realtor for amazing marketing, and put your home up for sale. Showings are occurring and offers are starting to come in. That’s when the fun begins! But, it can also be a little stressful when you’re reviewing multiple offers. There are many different terms to be considered on each offer, not just what the offer price is. The terms are just as important, and sometimes more important, than the offer amount. 

Receiving offers on your home

You got your home ready, worked with your realtor for amazing marketing, and put your home up for sale. Showings are occurring and offers are starting to come in. That’s when the fun begins! But, it can also be a little stressful when you’re reviewing multiple offers. There are many different terms to be considered on each offer, not just what the offer price is. The terms are just as important, and sometimes more important, than the offer amount. Check out this video to learn more…

Client Testimonial – Lititz Living

Buying and selling a home at the same time! I had the privilege of getting to know this sweet couple as I helped them buy a new home in Lititz Boro and sell their old home. Both transactions went smoothly and I was so happy to help them make their dream happen! Now they have a fun lifestyle of walking downtown to enjoy Tomato Pie, Chilangos, Grecos, Wilburs, Lititz Rec, and more!

5 Factors for Your Home Value

What is your home worth? You may have heard it called your home value, your market value, or a comparative market analysis. Basically, all of these refer to what your home would be worth if it was listed on the market today. It is an estimate of how much your home would sell for, or how much a buyer would pay for it today. Find out the factors that will determine your home value here.

What Is Your Home Value?

Are you curious about what your home would sell for or how much a home buyer would pay for it? There are five main factors that determine how much your home would sell for or how much your home is worth in today’s housing market. Are you thinking about selling your home and buying a new home? It’s important to know your home value so you know how much equity you have to work with.