That beautiful, quaint little home at the end of the street might be more trouble than it is worth. Sure, the landscaping is immaculate and the porch looks delightful. So what if the roof, siding and foundation need work?
These could be some problems that are facing a number of homeowners looking to purchase a fixer-upper. As the housing market continues to be competitive, more buyers are widening their searches to include many properties that might be in a state of disrepair. However, even the handiest people might encounter a few problems that are over their heads. Before diving into a purchase, there are several key areas any prospective buyer should pay attention to.
When a fixer-upper could be a smart choice
Moving forward on a fixer-upper should always start at the same place - with a home inspection. The importance of this crucial step should not be understated. Without one, buyers might not know the full extent of the problems associated with a property, and instead could end up with a house that is more trouble than it is worth. On the contrary, a home inspection may also sway the decision in the other direction, convincing someone to go forward when they might have been indecisive.
Today's real estate market might make choosing a fixer-upper a distinct possibility. Demand for homes is high, and buyers could have to move fast in order to secure a deal. Therefore, hoping that the sellers themselves make all the needed repairs might not be realistic, according to MSN Real Estate.
Chasin Prather, of ERA Buy America Real Estate, told the news source that relying on the seller to do that isn't a smart idea, and many buyers should assume that they'll have to take the home in its existing condition. Instead, competition gives the seller more leeway to refuse repairs, leaving the choice in the hands of the bidders.
Due to that, buying a fixer-upper might be a good idea depending on the result of a property inspection. If the total amount of repairs don't outweigh the positives, buyers could decide to make an offer.
Some problems are better than others
Not all home hazards are created equal. Picking the perfect fixer-upper comes down to choosing houses in which a home inspection identified mostly cosmetic damage.
The less structural damage is present, with more simple touch-ups to the appearance, the easier it could be for a new homeowner to make all of the necessary changes, according to This Old House. For example, a fixer-upper that needs a drastic paint job isn't so bad, and the same goes for drywall repairs and floor refurbishing. Those upgrades cost less than other problems, making them a safer investment.
However, there is also a fine line between cosmetic repairs and structural ones, the news source noted. Larger house additions are costly, and identifying the right ones ties in closely with home equity. A bedroom addition may result in a homeowner drawing even, but a new bathroom could end up returning as much as double on the investment.
Fixer-uppers to stay away from
While cosmetic repairs are often easier for homeowners to do, there are also a number of other problems that could crop up in a property inspection.
Moreover, one of the biggest buyer red flags could be foundation issues, MSN Real Estate noted. Those repairs are typically costly, and might not be worth the trouble. Additionally, it might also hamper financing if a lender becomes privy to serious problems.
Mold is another serious concern for buyers, and the remedy often includes repairing plumbing, drywall, or drainage issues, the news source reported. All of which means new homeowners spend more time writing checks rather than enjoying their property.