Are you a first time home buyer?
If you said yes, you may be considering purchasing a fixer upper. However, there may be some things that you don’t know. Here are the major ins and outs of buying a fixer upper.
Purchasing a fixer-upper can be a good option because the price will be lower. But you must keep in mind that fixer-upper homes come with flaws and some can be huge. Foreclosures and short sales can offer better prices if you can deal with potential maintenance needs.
Many first-time home buyers only calculate the mortgage, down-payment, homeowners’ association dues, property taxes, and other hard costs. However, being the inexperienced home buyers that they are they tend to neglect factoring in the everyday repairs and maintenance for the property. Things like a new water heater, stove, microwave, central heating/air conditioning systems, washer/dryer and dishwasher repairs and even plumbing and roof repairs. While some of these systems may be in decent condition when you move in, a year or so down the road they will need to be repaired. When they do, the added costs can put a strain on homeowners’ monthly budget.
With this in mind, buying a fixer-upper for your first home can be a great way to get into the real estate market at a good price. However, you must understand the repairs the home will need before you buy. Things to consider include how much you’ll save by buying a fixer-upper versus what you’ll need to spend to make it livable, how old the home is, who will do the repairs, and how much patience you have for this project.
Location, Location, Location! You must come to terms with the necessities of a first home. On one hand you can buy a brand new home that is done up to the nines but it is in a horrible location and then later nobody wants it. On the other hand you can buy an okay or fixer-upper home in an ideal location, and suddenly it’s worth millions. So, when shopping for a fixer-upper, be very careful to survey the neighborhood and make sure it’s in a location that is worth spending your time and money to fix.
You need to carefully study the cost and savings of buying a fixer-upper. Get a home inspection to ensure you understand the basic repairs and maintenance needs. If there are problems with the home, make sure you consult with experts to give you an idea about how much the repairs will likely cost. Very Important >> Be sure to consider the age of the home. If a home is very old, it may have some charm but it will most likely have a lot of nightmare issues that aren’t always easy to spot. This can be things like plumbing or electric wiring issues, lack of insulation, structural or foundation problems, etc. You don’t have to steer clear of an older home but you NEED to do your homework first.
Find a good, and trustworthy, handyman to help you go through the problems of an older home so they can help you understand the things that will need to be fixed.
Have patience! Remodeling and even just making minor repairs can take longer than you think. Remember you chose a fixer-upper to save money.
No go out and buy that first home!