Before Buying a Fixer Upper Home

Home Improvement

Home renovation shows like Fixer Upper and Flip or Flop, make the process of purchasing an “as is” home look seamless. The shows only reveal a few hiccups along the way and a happy, high profit ending. In the real world, buying a fixer upper requires a lot of research, decision making and risk taking to come out on top. Planning ahead can help you anticipate problems before they arise and stay on track with your budget. If you make the right moves, your sweat equity could really pay off! If you’re considering purchasing a fixer-upper, follow these tips.

Step 1: Find a Home that Needs a Makeover. Not an Overhaul

When it comes to searching for the perfect fixer-upper, look for a property where the high price tag items are in good condition. Faulty roofs, HVAC systems and foundations can be expensive fixes that will make deep cuts in your renovation budget. Outdated paint, fixtures and flooring are typically affordable and simple cosmetic changes that most home buyers can DIY.

Step 2: Determine What You Can Tackle Yourself

The next step is to take a close look at the property and decide what renovation projects you can realistically tackle. You may have a knack for painting or flooring, but need help with electrical work and plumbing. Make a list of the projects you can DIY and a list of the projects where you’ll need to call in the professionals.

Step 3: Know the Renovation Costs Before You Make an Offer

Hire a trusted contractor to walk through the house and give you a list of repairs and an estimate. If you plan to do a lot of the work yourself, make a detailed list of the supplies and time it will take to complete each project. A good rule of thumb is to add 10% to 20% on to your estimate in case you run into any unforeseen issues.

If the home has structural issues, hire an engineer to inspect the home to make sure you know the full extent of the damage and what it will cost to repair it. Don’t purchase a home with foundation issues unless the problem can be fixed, you received a significant discount and have a binding written estimate for the cost of repairs.

Step 4: Check Permit Costs

Check in with your county’s permit office and see if there are any permits or codes you’ll need to follow during the renovation. Not having a permit can save you money upfront, but it will cost you greatly in the long run when you’re ready to resell your home.

Step 5: Research Financing Options

Make sure you are financially prepared to cover a down payment, closing costs, and repairs without draining your savings. If you’re planning to pay for repairs with a home equity or home improvement loan, get pre-approved for both loans before you make an offer. Securing both of these loans will get you the cash you need to start repairs asap. Hire an experienced Outer Banks Realtor that can point you in the right direction when it comes to financing options.

Step 6: Determine the Fair Market Value

To calculate the fair market value, ask your Realtor to estimate how much the home would be worth after all of your desired repairs. Next, subtract the the upgrade and renovation costs. Knowing this number will help you place a fair offer on your fixer upper.

Step 7: Don’t Skip Inspections

When it comes to this step, make sure to hire professionals to inspect the home for hidden issues like mold, lead-based paint, radon, septic and well problems and pests. When taking a big risk on a property, you want to make sure you’re aware and equipped to handle problem areas. Bad inspections give you the opportunity to back out of the deal if the home has major issues that will not be worth your time and investment.

Giving an old home new life can be a rewarding experience for yourself, both personally and financially. The key is to be patient, do your research and find experienced professionals to help you get the job done. If you’re in the market for a fixer upper on the Outer Banks, contact us. We’d be happy to help you during your search and guide you through the home buying process.