Wednesday, June 17, 2015 / by Bill Berning*
“Needs a little love,” “project home,” and “fixer-upper” are terms that pop up on listings around the country, aimed at enticing energetic and industrious homebuyers who are looking for a unique and rewarding challenge. However, are you really up for the demands that come with this kind of home purchase? To answer this question – and address a variety of other concerns that come with fixer-uppers – let’s hear from some of the leading voices in the real estate industry.
The concept of the fixer-upper is definitely appealing – as long as you know what you’re getting into before you sign on the dotted line. Unfortunately, too many new homeowners bite off a lot more than they can chew on this front and end up stuck in a bad real estate position. From poor planning to an inflated sense of ability regarding renovations, there’s plenty of issues that can derail this kind of project. However, after reading over these five important points, you’ll be able to move forward with confidence and certainty as you write the next great chapter of your home life.
If you’re reading this, chances are you either have your sights set on a home that needs a little help to get back in order, or you’re at least considering the possibility of including these types of offerings in your search for a new place to hang your hat. As exciting as this proposition is, it’s still important to understand that investing in a fixer-upper isn’t always a simple affair. In fact, if you’re not careful, this dream home could lead to a certified real estate nightmare. Thankfully, there’s plenty you can do before claiming the deed to ensure that everything goes smoothly as you tap into the potential found within these project houses.
Get Your Math in Order
To start off on the right foot, Geoff Williams of U.S. News and World Report suggests getting your math in order before you even start entertaining the notion of buying a home in need of numerous repairs. As obvious as it may seem, the truth of the matter is that many homebuyers get locked in on certain price points and ball park figures, without any real reasoning behind the decision. Even though guesswork and estimations can suffice for certain investments, these substitutes for actual hard numbers shouldn’t ever hold a spot in the discussion surrounding fixer-uppers.
Thoroughness is the name of the game when it comes to truly getting your math in order. Obviously, spending the time and effort to include every expense – from closing costs to inspections and material supplies – isn’t exactly the most engaging part of the process. Even so, you’ll be thanking yourself later if you get these details hammered out and accounted for as soon as possible.
Understand the Difference Between Fun and Work
Additionally, Williams also goes on to explain that prospective buyers looking into developmental housing opportunities need to understand the difference between fun and work in terms of project requirements. While you might stylize yourself as a “do-it-yourself” kind of person, taking on weekend projects – like renovating a backyard – isn’t the same thing as repairing structural damage.
Outside of separating your preconceived notions from reality in terms of the scope of the project, it’s also necessary to be wary of waning interest in the renovation process. For instance, it’s easy to stay excited and motivated when you’re completely transforming a dated or damaged kitchen, or something else that’s considered fun, but keeping the same level of attentiveness when handling “boring” projects – like replacing a damaged center beam within the foundation of the home – is just as, if not more, important.
Break down Your Project Needs
Once you’re set on going the fixer-upper route, This Old House magazine’s Jeffery Rothfeder notes that it’s time to break down your projects from a variety of angles. First off, figure out what you can and can’t do on your own. This way, you’ll be able to start feeling out contractors and professionals who are capable of handling the job on your behalf.
After this point, it’s time to figure out the order of project development. While most homebuyers might not factor this concern into the discussion revolving around a fixer-upper, you don’t want to inflate the cost of renovating your home via poor sequencing. It might not seem like a big deal in the preliminary stages of the conversation, but finishing up a bathroom remodel, only to have to tear it up to do foundation work, can set you far off course when it comes to your predetermined budget.
Don’t Be Afraid to Bring in an Expert Opinion
Even if you’re convinced that you can handle all of the associated projects with this home on your own, it’s never a bad idea to spring for a second, professional opinion. As G.M. Filisko explains on behalf of the National Association of Realtor’s House Logic blog, relying upon your personal experience – or that of unlicensed friends – could spell disaster for your home’s future. Home inspectors and specialists have years of time on the job and the training needed to spot what the average homebuyer might miss, so don’t be afraid to turn to these professionals as you map out the costs and sequencing of your home improvements.
Review Your Plan Before Signing on the Dotted Line
If you’ve handled all of these considerations thus far and you’re confident that it’s time to sign on the dotted line and take the plunge, pump the brakes a little and step back from the situation for a moment. Purchasing a home in need of work is a challenge that can be highly rewarding, but the last thing you want to do is make a commitment that you can’t reasonably keep. To ensure that you’re comfortable with the path ahead, take some time to review everything you’ve covered here and guarantee that it’s in line with what you’re willing to put into the home.
Naturally, embodying all of these steps comes off as a methodical or overbearing way of approaching the home buying process at first glance, but it’s entirely necessary if you’re serious about investing substantial funds into a fixer-upper. From crunching the numbers to seeking out the help of realty experts, shielding yourself from the myriad hazards that can undo a home in need of renovations is the only way to preserve and realize your own, unique homeowner dreams.