 The Pros and Cons of Buying a Fixer-Upper
Original Content by Carl Johnson You are finally set up and ready to start house hunting, you have your finances ready to go, the best real estate agent around (Carl of course!), and a list of wants, needs, and dreams for what you are looking for in a house. And sometimes along the way, checking off those wants of your dream home seems like a long shot . . . but having an open mind and the ability (or a REALTOR® with the ability) to see a house’s potential can help you reach as many goals as possible! First, let us start off by saying that a fixer-upper house does not mean a full renovation or even having to put money into the home right away before you move in. A fixer-upper can be as much or as little as our clients want it to be. Whether you want to paint right away or if you want to save and then add an addition in ten years, there are unlimited options you can put into a house to ‘fix’ it up! Below are a list of some quick and affordable fixer-upper to-do's as well as more lengthy projects that are good to keep in mind as you go tour houses: More Quick or Affordable Fixer-Upper Projects:
More ‘Down-the-Road’ Fixer-Upper Projects:
At Carl Johnson Real Estate we are here to work with you for all of your needs, and offering a visual for how a house can be updated, renovated, or simply painted to become your home is something we love to do. When the price is right and the home is in the right location, sometimes buying a fixer-upper is just what you need. Follow along in this article for some Pros and Cons of Buying a Fixer-Upper. Location PRO The first pro of buying a fixer-upper that comes to mind, is the flexibility it adds to finding a house in a location our clients desire. As the Triangle and nearby towns such as Roxboro, Gibsonville, Mebane and Oxford become hot spots, houses in these in-demand towns become more competitive. Having the ability to buy a fixer-upper allows us to find more houses available to you than simply a new construction home only for example. Also if you are waiting for a specific type of home (new or already fully updated) in some of the city locations, which tend to be historic (and beautifully so!) you may find yourself hunting in the housing market for months longer than those who are willing to buy a fixer-upper. But when location is a must, whether it's a need for being close to work, near a favorite outdoors area, or simply a neighborhood or community you want to be in, adding fixer-upper type homes to your list allows for so many more options to tour as well as decreasing your competition of other buyers. Being open minded to a fixer-upper house literally opens the door to more options in the location you want. And remember a fixer-upper can mean as much or as little as you want it too (sometimes it is just seeing past that old yellow painted interior which other buyers are not able or willing to do!). Save on Home Price PRO It is obvious when a home on the market is a major fixer-upper project and this can be seen in the list price right away, but this same theory goes for homes that need small changes as well. The more work a buyer has to put into a home the lower the list price goes because in general most buyers are looking for a turn-key house. This is why our buyers who are willing to see a home as a fixer-upper have an upper hand, and can save money! A popular trend we have found is that Buyers like to see updated fresh kitchens and bathrooms, these are always selling points on a house. A house before the kitchen countertop is updated to granite or quartz and the appliances to stainless steel may sit on the market longer than a home with these updates already finished. Our clients get more buying power the longer a house sits on the market, which may lower the price over time or allows our clients to make a more competitive offer. Major renovation projects on a fixer-upper also offer more major price discounts on a property. Though it is costly to bring in a contractor and to start knocking walls down and adding them back in, in the long run you may find that buying that three bedroom at a lower price in the neighborhood you've dreamed of and adding in a fourth bedroom as a master suite one day can save you money. The property value of a fixer-upper also appreciates more over time than a move-in ready property. Sweat Equity is a real thing in the housing market and as you put more into your home you will get more out of it. As the move-in ready house value will only increase with the industry trend, your fixer-upper property will have a higher percent increase as your updates move that home into the same bracket as its previously higher prices move-in ready comparison. Makes a House a Home PRO One more pro of a fixer-upper is that you can make a property go from a house to a home, this is a priceless pro to buying a fixer-upper. As you add your personal touches and vibe to a house, it becomes more your style and your happy place to go to. Coming home after a long day at the office to your cozy personal designed front porch where you can relax, or taking the time in the morning to enjoy your custom built coffee bar you added, there is a peace of mind that no one else can offer except your own hard work and care. There comes a certain pride with welcoming friends into your home where you hand painted the railing, you designed its interior calling color palette, or hosting a party in your gourmet kitchen you saved up to create. Yes, these will have a positive impact on the value of your home for the future but it is the priceless value the after effects of a fixer-upper can have on our clients that we love to share! Pay Attention to the Inspection (known expenses) CON Though there are a lot of pros of buying a fixer-upper property, there are cons that come with it as well. As with any property our buyers are purchasing, we make sure our clients are aware of what the home inspection report finds, and this goes especially for those that are considered major fixer-uppers. A home inspection won’t say things such as: needs new paints or the light fixtures are dated, but items more major as well as some minor can pop up that need attention. Some typical inspection report items that can reviewed are:
It is important to read through all the details of the inspection and note items that would be major expenses needed right away on the property, items that could be potential large expenses in the future, or some items which may be deal breakers right off the bat. We work with our buyers to go over the inspection report, line by line, and make sure if you are buying a home as a fixer-upper that, to the best of our knowledge, you are not taking on too major of a project. Down-the-Road Issues (unknown expenses) CON Just like with any property, there are always things that pop up when you least expect it which cost money to correct. From a garage door coil that snaps to a hot water tank that leaks, at any time unexpected expenses happen that are part of being a homeowner. As you get into renovations and open walls in the house, you increase your odds at finding added expenses. For example, often in older homes electrical and plumbing needs to be updated to the new codes while you start making renovation changes and you won’t know what you’ll find under the floor or behind a wall until your project starts. These unknown expenses, which exist for all types of property owners, are slightly increased on a fixer-upper home and the more renovations needed the more these random expenses can increase accordingly. Your Property - Your Choice - We’ll Help! At the end of the day, it is up to you as our buyer client to decide how comfortable you are with any level of a fixer-upper and we will work with you to meet those goals. But a fixer-upper is a great option to get your home in your price range. We help you win in a competitive market, or to help you get in the location you desire. Whether you plan to DIY the home or you may want to hire an interior designer or contractor, you are able to make most any house into your dream home, and we at Carl Johnson Real Estate are here for you! CLICK HERE to read about the options you have for a home inspection.
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