Have you ever wondered why so many people on shows like House Hunters want to buy a home that needs work? Well, actually it’s usually just one of the house hunters who wants to find a house that needs work. The other one typically wants the complete opposite — a turnkey house that is move-in ready. Who knows? For the sake of the show, maybe no one wants to buy a fixer-upper but they drop in that possibility to make it more interesting. Let the drama begin!
In real life, there are actually several reasons why someone might be seeking that type of house. The first, of course, is the price. Houses that need work tend to be less expensive than houses that are almost perfect.
The second reason why someone might want a fixer-upper is the sincere enjoyment of the work. People who like carpentry, painting, architecture or design might truly enjoy puttering around on the weekends to make it their own. It just needs a little tender loving care, right?
And finally, there’s the challenge of creating a modern marvel from a ‘50s fiasco! You’ve seen the success stories on TV. Shows like Fixer Upper make it look so easy. Even if it isn’t exactly easy, at least it almost always has a happy ending. (It’s usually the middle of the project that gets a little dicey before it all works itself out in the end). Fixing up a house that needs TLC can be exciting. If you’d rather spend a Saturday at Home Depot than on your couch, this might be the kind of house for you.
But you need to remember — it doesn’t always turn out the way it does on TV. The work is often more complicated — and expensive — than you initially expect. The worst-case scenario is finding some unhappy surprises after the work is already underway. When there’s no turning back.
So if you’re in the market for a new — or first — house, take some time to think about your dream home before you even start looking. Seriously. Whether you’re on your own or shopping with your partner, this is something that should be discussed or considered in advance. Because even if you think you’d never buy a fixer-upper, there’s sure to come a time in your search when you consider it!!
Maybe you’ve looked at seven perfect homes, only to find out that they’re all priced higher than you can afford. Or that they were all snapped up on the first day they were listed. Or maybe your dream house isn’t in your dream neighborhood. And then there it is – a beautiful house on a great lot in the right neighborhood. But the inside is a disaster. And then you find out that the price is, gasp, way under budget! And suddenly there you are, thinking of buying a fixer-upper!
So here are some tips to consider before you jump in with both feet. Because when you buy a fixer-upper, you want to be sure you’re not getting a money pit.
Beware too-good-to-be-true house prices. If the home’s asking price is waaaaaay below neighborhoods comps, the seller is probably trying to unload it! Be careful.
Know your numbers. Get pre-approved for a certain amount of money before you even start house hunting. Calculate your household income and monthly expenses. That will help you determine how much you can afford to spend each month.
Then do the math. If and when that hard-to-pass-up fixer-upper does present itself, calculate the cost of all the renovations and add it to what you’re willing to pay for the house. Is it still at or under budget? If so, go for it. But if the seller counters, don’t be tempted to keep bidding higher and higher.
Get a home inspection from a reputable inspector. Ask your realtor for the name of someone you can trust. Closely review any structural problems that the inspector finds and determine the cost to make the necessary repairs.
Get estimates for the cosmetic changes. Bring in decorators and builders that know their stuff so you can get accurate quotes on the changes that you want to make.
Then give yourself some wiggle room. You should create a cushion in case things cost more than you expect — or you decide to make additional changes as you go along. When you first saw the house, you probably noticed things you’d like — well need — changed. New paint, new bath, a wall torn down, new flooring. It can add up. So when you come up with your budget, add another 50% as a cushion. And beware the unexpected.
Three strikes and… it’s time to walk. No matter how much you love the idea of your dream house, if the costs exceed your original budget, it’s time to let go. You’re officially getting a money pit. Don’t let your dream home turn into a nightmare.