Fixer-uppers

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs

When choosing a fixer upper for your home purchase, there are careful considerations to make regarding the purchase. A fixer upper will mean hours, days, weeks and months of working on the home before completion, as well as, an entirely different mortgage ball game. A fixer upper offers the chance to take a piece of history and make it new and bright again, but the process is often larger than the new homeowner has planned for.

A home can be considered a fixer upper if there are clear signs of wear and tear. These signs may not be so evident to the home buyer, but the inspector will find all of the needed repairs during the walk through before the sale. When choosing a fixer upper there are three things to carefully consider.

•    The mortgage process. There are more than a few times when the fixer upper will be listed on the market for a higher price than the mortgage company is willing to own. This can be due to the overall age of the home, the overall condition and the possible resale value of the home, as is. The mortgage company will not take into consideration the changes planned for the home or the potential worth later. This may means shelling out more money in a down payment before even beginning the renovations.

•    The overall cost of renovation. The renovations on a fixer upper can range from mild to major. When roofing needs to be replaced, hot water heaters, all appliances, cabinets, flooring and bathroom fixtures, you are talking about investing an additional $20,000 to $30,000 in the home before making that first year of mortgage payments. These costs can not be figured into the mortgage and will need to be pulled from saved income.

•    Long term? After putting a wealth of time and money into a home, there will be a sense of ownership greater than with any other home. The fixer upper becomes a part of the owner. If you are not willing to live in the neighborhood housing the home for 5-10 years, the home should probably be left on the market for the next buyer.

Choosing a fixer upper means investing time and money into a home that is not move in ready. There can be extensive amounts of money that will be needed for the overhaul of the property. Unlike a new construction, the fixer upper will take nearly all of the free time in your life during the time of renovation. If the home buyer is willing to place time, money and work on the line, the fixer upper may be the perfect choice.