Tips for Buying a Fixer-Upper Home
Most people want a house that is move-in ready. But, others are up for the challenge of a fixer-upper. While you naturally need to invest in renovations, these costs, combined with the low cost of the home, can work out to significantly less money than buying a ‘’regular’’ house. It also presents the opportunity to create your dream home, which is attractive to people with a very specific vision for their abode. But, you must tread very carefully down this path, or you could end up living a very stressful, expensive nightmare. While it would not be possible to cover every consideration in one post, here are a few important tips to get you started on the education process of buying a fixer-upper.
Get a Thorough Inspection
Getting an inspection is an important part of the process, regardless of the type of home you are looking at, but it is doubly important if you are thinking about buying a fixer-upper. Sure, a house needs some work, you get it for a low price and expect the value to skyrocket once it is all spruced up. But, if a house has serious structural issues, it may not be worth it because these repairs are very expensive and address elements of a home that people expect to be in good working order, like a foundation without cracks or wiring that is not faulty. These things will not really increase the value of the home, but rather, get it up to par with ‘’regular’’ homes. There are many different types of inspections you want to get for a fixer-upper, and you may be able to persuade the seller to foot the bill. Besides the typical home inspection, you might consider a roof certification, pest inspection, sewer line inspections and engineering reports.
What to Offer
One of the most important tasks in your quest is figuring out how much to offer for a home. After a painstaking assessment of the house, figure out how much renovations will cost; you should definitely err on the side of overestimating costs than underestimating. Research what comparable ‘’regular’’ homes in the area sold for in the area and subtract your renovation costs. To arrive at your final price, you also want to subtract at least an extra five to 10 percent to account for any extras you may decide to add, and the inevitable unforeseen issues and mishaps in the renovation process.
Make sure all your financial ducks are in a row before purchasing your fixer-upper home. If you are planning to pay for the renovation of the home with a loan, do not wait until after you buy the house to apply for it; get pre-approved for it, just as you would with a mortgage loan. The Federal Housing Administration’s (FHA) 203a(k) program helps people who are looking to buy homes in need of rehabilitation. With this program, the cost of the home and the cost of repairs are combined into one mortgage payment—the maximum amount varies depending on the location.
About the Author:Kelli Cooper is a freelance writer who blogs about all things home improvement and real estate; if you are looking for Chicago window replacement, she recommends contacting the most trusted window replacement company in the country.