With the market being so competitive for buyers right now, the cheaper homes can be tempting despite the seemingly obvious work. Here are 6 points to be aware of:
- Realtors typically define Fixer Uppers as homes with major system failures like roof, foundation, plumbing, electrical, etc. Be aware of these items beyond cosmetic eye sores like funky lights, carpets, etc that can be more eye catching upon first glance.
- Renovations are costly. Beyond cost of the materials for your updates, you have labor, permits, architects, that farmhouse sink you now MUST have, etc. A kitchen remodel costs $60,000 on average nationally for example.
- Surprise! You opened the wall and your project went up 10-25% over estimated costs due to strange things the contractor found lurking within the history of the house. Unforeseen costs are rarely avoided.
- Your 203k FHA (or similar) loan has an added level of re-inspections and stress you can never quite prepare yourselves for as you wait for the contractor and lender to coordinate everything they both need to keep things moving forward.
- Your money is limited. It's easy to run out if you lose site of the overall goal of the project or have a couple unforeseen obstacles causing everything to stall due to the financial situation.
- Construction zones aren't the easiest or healthiest of living conditions. Some cities don't allow you to live in the house during repairs. These are inconveniences to be aware of.
Fixer Uppers can be the right fit for many buyers with the potential to refresh a dated home into their new dream house. But it's never as easy or smooth as your favorite house flipping show makes it seem.