When you’re a first-time homebuyer, choosing the perfect house can be a daunting task, especially if it’s your largest purchase ever. It’s reasonable to want a house that fits you exactly, but unless your budget is unlimited, chances are this will never happen. One way you can get around this is to buy a fixer-upper.
With this type of purchase, you have the freedom to make your own choices rather than have someone else make them for you. Keep in mind that while fixer-uppers can vary in project scope and cost, it’s best to search for fixer-upper properties in your area that have a solid foundation. While they can save you money, ones that require a complete renovation are only going to sink you financially in the long run.
With that being said, fixer-uppers can be a great investment if you purchase a property that’s structurally sound, and these types of homes are your best shot if you’re looking to stay within a specific budget, especially for a home in a more desired neighborhood.
How Do You Go About Buying a Fixer-upper?
Follow the steps below.
-
Find a real estate agent. Simply put: Leave it to the skilled professionals at Annette Yorks Group who have the experience and market knowledge to find you a home that suits your needs.
-
Assess the amount of work the home needs. Look for homes with problems related to appearance rather than structural integrity or mechanical systems.
-
Estimate renovation costs, and determine an offer price. Once you have an idea of all remodeling expenses involved, you can use this as a bargaining chip to negotiate a lower price.
-
Hire an independent inspector. Sales are usually contingent on the approval of an inspection. If it’s not, make it part of the condition for purchase. If there are critical issues found prior to the sale going through, it falls on the seller, not you. What’s more, any serious problems could ultimately derail the sale.
-
Shop for a mortgage. First-time home buyers who don’t have a long credit history can apply for FHA loans. These loans have less stringent credit requirements and don’t require 20 percent down.
-
Look for special home renovation programs. Low-interest loans, tax incentives, grants, free labor and more may be available to you through your local government.
What About Renovations?
To get the most bang for your buck, it’s best to handle repair and design projects yourself. If your fixer-upper has mostly cosmetic issues, these kinds of tasks shouldn’t be a problem. If the house requires work that can only be performed by someone who has a license, hire someone for the job. It’s better to be safe than sorry.
When it comes to knowing what DIY projects to tackle first, it usually boils down to four deciding factors:
-
Essential renovations
-
Your wish list
-
Your return on investment (or your reason for taking on the project)
-
Your budget
Whatever the DIY project may be, keep in mind that it’s important to use the right tools. Drills can assist you with everything from installing shelves to replacing deck boards. If you’re trying to get rid of old wallpaper, sanders are especially useful in removing glue and creating a smooth wall surface. Jigsaws, on the other hand, can help with creating holes in countertops and metal, wood and ceramic surfaces.
What Happens Beyond the Repairs?
After your home is all fixed up, there’s only one more base to cover: Should you stay or should you sell? Before you make your final decision, consider what your newly renovated home means to you. If it’s near and dear to your heart, why not stay awhile? You can always sell the home later when the timing is right.
On the other hand, if you’re proud of your accomplishment but are concerned about your financial future, put your house on the market. Either way, take some time to think it through. It might be beneficial to make a list of pros and cons. Remember, only you will know the right call to make.
