What Homeowners Should Know About Fixer-Uppers
Whether your buyers are intrigued by the idea of transforming a home from drab to fab or they just love those HGTV shows like Fixer Upper, there are a lot of things to consider when purchasing a fixer-upper in today’s real estate market.
Let’s look at what a fixer-upper is and the pros and cons you may want to make your buyers aware of before they make an offer.
What Is A Fixer-Upper?
A home that is considered a fixer-upper tends to be an older home that requires upgrades to many, if not all, of the components of the home such as electrical, plumbing, roofing, and aesthetic aspects. Substantial repairs for livability and safety usually need to be completed before an individual or family can live in a fixer-upper.
Often, the most interested buyers for this type of home are those who feel that they are getting a “steal” on the price due to the condition of the home or buyers who want to do the needed repairs and “flip” the house for a profit.
Pros Of Buying a Fixer-Upper
There are some very enticing reasons why a buyer may want to invest in an eyesore property or one that needs some major renovations.
One of the biggest is that the price of a home in this condition may be more in the range for some buyers to be able to afford homeownership. Another includes the concept that renovations mean the new owners get to decide the colors, materials, design and style of the renovation customized to their needs or wants in a home. In other words, a home that needs major renovations can be somewhat customized to be what the buyers want in their dream home.
Generally speaking, even in this very strong real estate market, there is a little less competition for homes that need work than those that come turn-key. This could be attractive to buyers who have lost out on the bidding process or been unsuccessful in buying a home previously.
Cons of Buying A Fixer-Upper
While it may be alluring to consider renovating a home to your specifications, buying a home that needs work does not come without its hazards.
As a real estate professional, it’s part of your job to remind your buyers that while they are falling in love with breaking down walls and gutting a kitchen, all of that takes money, time, and know-how. Have the buyers talk to a contractor to get a realistic estimate of what these upgrades and changes will cost. This should include considerations for any unexpected repairs that could be needed as the renovation moves forward.
In addition to worries about renovation costs, buyers should also have an idea about the health of the house. Often a home that has fixer-upper potential has not been well maintained. A solid home inspection is a must for these types of purchases as there may be major issues including those that could be deal breakers. It’s one thing if a home needs a little elbow grease and some upgrades to bring it into this century but when a home has poisonous mold, structural issues or other things wrong that could break the bank, it may be a no-go for purchase.
Help your clients realize that there is more to flipping a home than just picking out colors and fixtures. It is a huge time and money commitment that should be entered into with eyes wide open. Look at comps in the area, make sure the home is a good investment and that the time, energy and budget are solid before making an offer on a fixer-upper.