With the advent of Do-It-Yourself or Fixer Upper Programs, the home buyer is becoming more educated on what it takes to turn a fixer-upper or an As-Is Home into realistic expectations.
In real life, renovating a home that has been left in less than a desirable condition or abandoned can be a very daunting and money consuming task. This is especially true if the buyer has little or no experience or does not know someone in the trades to do this work.
As a Buyers Agent, my priority is to assist clients in finding a home and making an informed decision. When someone asks me about finding a Fixer Upper or is looking at a home priced way below market, I spend a lot of time making sure they understand the long not so rosy path ahead of them.
1. There are no deals out there that you have suddenly discovered.
If you are just starting to look at the market and see a home priced well below the market, chances are good that there is a reason it is there. Trust me when I say if it is on the market more than 10 days, it has been looked at by a seasoned investor or contractor and they have determined that it will take too much money to fix it up and get a return. However, if you are planning on living in the home then you are purchasing it for a different reason.
2. If you see a home that says:
Being Sold As-Is
Title 5 is buyers responsibility
Seller has never lived in the home
House needs TLC
House needs major renovations
Buyer responsible for inspection of well, septic, smoke detectors, etc
House has been winterized, buyer responsible for turning on all utilities
Then you know that this house may need major work
3. During the inspection period, bring a licensed contractor with you. Walk through the entire house and discuss/make notes on all the repairs/renovations needed. One of the biggest mistakes I see is underestimating the cost of the work. Once walls are opened and defects are exposed, it can become a nightmare. This especially holds true if you have NO experience with renovations. Being handy with a paintbrush will not prepare you for what is in store on some of these homes.
4. The year of the home is important! Any home pre-1978 falls within the EPA Lead Law. It is so important to be familiar with this law and how it incorporates into your home buying purchase. it makes a difference if you have children under 6 and you are going to be living in the home and it also matters if you plan on being the landlord and will be renting it out. Not following this Federal Law and also the law as it pertains to the state you live in could cost you thousands in fines and other problems. Here is the link to the EPA Lead Law the Massachusetts Lead and the Rhode Island Lead Law
Despite what anyone tells you, these are the laws in effect and need to be read and adhered to.
5. Types of Loans
If you are planning on purchasing a home that needs fixing up, a conventional, VA and FHA loan will probably not work depending on what needs to be done. You need to talk with your loan officer and make him/her aware of your potential possibility of purchasing a home that needs some type of renovation. They can offer you other alternatives in financing such as home equity, home improvement loans, and FHA 203k which are specifically designed to help purchase properties requiring upgrades/renovation.
6. Your Decisions Matter
Buying a home in the best of conditions may have some problems but buying a home in less than desirable condition can be a life-altering decision. My job is to encourage and direct you to better choices.
It is important to let the experts do what they do best. You may have to hire 1 or all of the following people to help you make a decision:
Due diligence means taking caution, performing calculations, reviewing documents, procuring insurance, walking the property, etc. — essentially doing your homework for the property BEFORE you actually make the purchase
As your agent, I encourage my clients to review all recently sold comparables, property disclosures, deeds, town records including permits, septic as-builts, tax liens, tax records and information provided by the seller agent.
Buying a home can be an exciting experience but buying a home that you are not fully prepared for can be a nightmare. I encourage you to find an experienced agent in your area, fully discuss your wants and needs, let them help you make the right decisions and trust them to assist you in finding the right home that works for you, your budget, your level of renovation experience. You just may decide that a fixer-upper may not be for you.