Buying fixer-uppers are a super popular move nowadays — especially given the rise of shows like “Flip This House” and “Fixer Upper.”
Not only do fixer-upper properties usually come at a lower price than move-in ready ones, but they’re also just fun projects. Gung-ho homeowners can dive in, DIY to their heart’s content, and truly make the property their own.
But fixer-uppers aren’t all fun and games. Since most are on the old and less-cared-for side, they also come with some serious concerns — issues that could threaten your safety, health or, in many cases, your pocketbook.
Are you considering investing in a fixer-upper property?
Let’s go over some of the common questions and concerns you might have.
Should you be worried about asbestos?
If you’re buying a home that was built before 1989, then asbestos should certainly be a concern. Asbestos-containing materials were outlawed that year, but before that, they were fair game — and asbestos can cause serious health problems if it’s still present in your home. Your best bet is to call in a qualified asbestos inspector to evaluate the property before you buy. If they do find asbestos on the property, they can recommend an asbestos removal company to come in and help — or you can forget buying the home altogether if you just don’t want to deal.
How can we make sure we won’t have to make serious, expensive repairs?
Don’t want to end up pouring a new foundation or redoing all the ductwork? Then make sure to have a full inspection done by a qualified home inspector before buying the home. Better yet, call in all the extra inspections you can. Pest, mold, termite, and septic tank inspections — the works — they can all help ensure you’re making a smart investment of your dollars (and that you won’t be on the hook for extensive structural repairs down the line.)
Can I ask for the seller to make any repairs before buying?
When you’re buying a mostly move-in ready home, you can usually ask the seller to make certain minor repairs before you agree to buy the property (or in some cases, negotiate a lower price point to make up for the shortcomings.) With a fixer-upper though — a property that obviously needs a lot of work — the seller has likely already factored the needed repairs into their listing price. It’s not as likely that they’ll be willing to do repairs on your behalf or lower their price to cover them. Still, it doesn’t hurt to ask — especially if there are urgent issues that need fixing, like a roof leak (which would damage the home) or an apparent pest problem.
How do I know if I have enough money to cover all the necessary work?
Call in a local contractor who can quote you for all the repairs and projects you’re looking to take on. They’ll be familiar with material prices in your area, and they may even be able to give you an estimate on how long the projects will take as well. If you’re going to need work done on some of the home’s bigger, more important systems — like plumbing, electrical, HVAC — make sure you get a quote from a qualified and experienced professional, not just a handyman.
How do I know a property is a good fixer-upper candidate?
A lot of seasoned fixer-upper buyers bring contractors along with them when they tour homes. This allows them to evaluate potential repairs (and their costs) before they get too far into the buying process. If you’re working with a strict budget, you should also make sure to factor in all of the costs — not just the repairs and projects you plan to take on. You’ll want to account for the cost of the home, the closing costs on your mortgage, the down payment, the furniture and decor you’ll need to fill the property, and so much more. Factor it all in and make sure it’s still within your resources.
How can I cover all the costs of the repairs and renovations?
A renovation loan, which gives you funds to use toward your upgrades, repairs, and projects within the home, is often a great choice. You also might consider purchasing a home warranty when you buy the loan. Though this won’t cover any major repairs that still need to be done, it will cover issues that crop up with what’s already there and working — things like appliances, the roof, the HVAC system and more. You may be able to customize your warranty, too, depending on which company you use.
Ready for Your Fixer Upper?
At Embrace Home Loans, we’ve helped countless buyers invest in fixer-uppers and create their dream homes. Want to do the same? Contact an Embrace loan officer today to learn how.