Considering Buying a Fixer-Upper? What to Watch For To Avoid a Lemon
Considering Buying a Fixer-Upper? What to Watch For To Avoid a Lemon
People often look for a fixer-upper that needs a lot of work but may be in a great neighborhood. The house itself has the potential to be a great home to live in with the right renovations and it is being sold at a low price. Just the idea itself can be really exciting.
Even though this fixer-upper seems like an opportunity to get into a good neighborhood for a steal, home buyers need to be careful. If they are not able to complete the work needed on the house they are going to be disappointed and frustrated with their purchase.
If you are considering purchasing a fixer-upper, make sure you consider the following, first.
Do Not Avoid Hiring a Professional
Many people plan on renovating their home without hiring a professional. Some people who already know how to fix plumbing or hang drywall may see significant savings by doing these projects by themselves. However, there are some projects that are best left up to a professional.
Think beyond whether a professional is needed or not. The cost of the materials is going to be a major expense. The more that needs to be completed in the house the bigger these costs are going to be.
Always make sure that projects are being completed up to code and avoid trying to do anything without prior knowledge. This means that you will definitely want to avoid electrical work that can seriously hurt someone who does not know what they are doing.
Get Estimates
Do not buy a fixer-upper and then start to get estimates from contractors on the renovation projects that need to be completed. Instead, ask the contractors to walk through before making an offer. They can provide quotes on how much it will take to get the house into the shape the home buyer desires.
This cost should be factored in when making an offer. If there are major problems that will cost the buyer a lot of money it may be better to ask the current homeowner to fix them before they sell. Negotiate the price with the homeowner if the cost of renovations is going to be significant.
Always Get an Inspection
Never buy a house – especially a fixer-upper – without a house inspection. Inspectors have the duty to find out the major and minor problems in a house. Even if the homeowner has pointed out the major problems that they are aware of there may be more problems lurking underneath that they did not know about.
Buyers should use an inspection to decide what renovations are important. From there you can figure out if the house is worth renovating at all.
Price It Out
Once all of these steps have been taken it is time to estimate how much is needed to fully renovate the home. If all the quotes have come back and a remodel for everything the buyer wants will be around twenty thousand dollars, it is not enough to simply set that amount aside. Always factor in at least ten percent more than the estimated cost.
Be aware that when buying a fixer-upper, new problems may come up while renovating. This will result in the project costing much more than originally expected.
Renovating a house to the exact specifications of a home buyer is a good way for them to get what they want in a home. It can also allow them to buy a cheaper house in a good neighborhood.
But home buyers should tread carefully. A price that seems too good to be true probably is. Major problems come with houses that need renovations and failing to realize the full extent of the work necessary is a costly mistake.