Buying a fixer upper home can lead to one of two final results: buyers either get a great deal on a dwelling to live in or flip for profit, or they may end up facing a scenario where serious problems expose the home for the money pit it actually is. However, anytime is considered a ‘good time' to buy a fixer upper, regardless of current real estate market conditions. The key to success is to obtain numerous inspections on fixer uppers, which can help buyers negotiate the bottom line price while giving them a good idea of what they're getting into beforehand.
Tips for Choosing a Fixer Upper Home
While many buyers want a move-in ready dwelling, those who can see beyond a few imperfections and are not intimidated by taking on a few repairs can get a great deal on a fixer upper—and enjoy less buying competition, too. Determining the best type of fixer upper can depend on a few factors that will vary in importance depending on whether the home will be sold, rented or become the buyer's primary residence.
- Location—Homes in desirable neighborhoods are typically more appealing regardless of the buyer's long-term intentions. Quiet communities with nicely groomed lawns and well maintained exteriors drive the home's resale value and appeal to buyers and renters.
- Size and Layout—Those planning to live in their fixer upper should choose a home that suits their needs and lifestyle. However, on the rental and resale market there are a few trends that seem to increase consumer's interest in a home. Homes with three or more bedrooms and two or more baths are highly in demand, as are those with spacious kitchens with multiple entries. Layouts with bedrooms on opposite ends of the home or on separate stories are also appealing amid the marketplace.
- Condition—Clearly, the better the home's condition is, the less and work and financial investment owners will face before moving in, selling or renting. Buyers need to be realistic about what tasks they can handle themselves, which need to be contracted out, and exactly how much repairs will cost overall before buying a fixer upper.
Once an investor has selected a home that meets all of the above requirements, they can proceed to having an inspection done to determine if the amount of effort needed to fix up the home is comparable to the potential profits.
Recommended Inspections for Fixer Upper Homes
Those planning to buy a fixer upper home in states that permit home inspections should definitely have at least a basic one performed by an experienced licensed home inspector. There is often a contingency in the pre-sale contract that allows one to cancel the purchase or renegotiate terms if deal breaking issues are discovered. Beyond the traditional inspection, it's important to look at other areas of fixer uppers with additional inspections such as:
- Pest Inspections—Fixer uppers within areas known for pest problems such as termites or wood-eating ants should get a professional pest inspection.
- Engineering Reports—In certain areas, obtaining an engineering report can be invaluable prior to purchasing any home. Find out if the home is near a landfill, has soil quality problems due to contamination, or is structurally at risk for succumbing to geological hazards.
- Roofing Inspections—Depending on materials and size, roofing can be a huge expense. As a staple of the home, it's wise to invest in a roof certification by a professional.
- Sewage Inspections—Homes with sewer line issues or backed up systems can be smelly and costly to repair. An inspection can save buyers a good deal of trouble by letting them know how ‘healthy' the septic is overall.
Inspections can give buyers extra bargaining power concerning working with sellers on price. Often there can be buyer contingencies added into the purchase contract requiring sellers to either resolve discovered problems or to lower the bottom line price to reflect the cost of repairs.
Evaluate Fixer-Upper Repair Estimates
With inspections in hand, potential buyers can better determine how much it will cost to make the home habitable. If the repairs are mostly easy fixes such as painting, power washing, refinishing flooring, replacing fixtures, doors or repairing broken windows these are not as big of a deal as major repairs.
Expensive and time consuming fixes like foundation repairs, HVAC replacement, roofing replacement or complete room remodels can get costly quickly. Get an idea of estimated home repair costs before buying to ensure any contingencies are adequately reflected in the contract.
Those looking for more advice on buying Belle Meade fixer upper homes should contact a local real estate expert or home improvement professional.