On the market for a Fixer Upper? Who isn’t nowadays? But before you find yourself ankle deep in moldy subflooring, take a pause and consider the work ahead of you. Does the property need a quick touch-up or a full refurbishment? The latter requires a commitment much larger than the mortgage paperwork and a coat of paint. Anyone can lather a nice earth tone over a lavender bathroom, but it takes a certain kind of person to navigate the path toward a successfully renovated Fixer Upper. Are you that person?
First of all, how busy are you? Time is a huge factor to consider when taking on the beloved Fixer Upper. Remember that boyfriend/girlfriend you had back in college, the one with all that potential? Remember how time-consuming that was? It’s kind of like that. If you don’t truly have the time or energy to see it through to the finished product, save yourself the heartache (and potential therapy) and walk away now.
The next point to ponder - how much money do you have? You might be able to snag that 1977 ranch for a dime, but in order to replace those harvest gold countertops and olive carpeting, you are going to need a few more dimes.
The problem arises in that many of us spend our available cash on the down payment, leaving nothing left for improvement costs. To make matters worse, the bank is typically not interested in your creative vision, and many lenders will not release more money than the property is currently worth.
There are, however, a couple options, for those buyers looking to borrow funding for improvements. If you are not looking to start the remodel immediately, U.S. News & World Report outlines additional avenues to explore when financing home projects.
For you handy folks, you can definitely save on labor costs with your DIY expertise. Building materials and equipment add up quickly, though, so price out all supplies to ensure you can cover the full remodel. If you're a penny pincher, check out wholesale warehouses and resale home stores for supplies.
Most homeowners can paint a wall like nobody’s business, but hang drywall? Rewire a light fixture? Tile a shower? Maybe not.
Fortunately, for those of us with a computer and some open evenings, we can YouTube just about anything. Between the internet and the neighborhood hardware store, you can accomplish a lot without hiring a professional. It will require your nights and weekends and maybe some walks around the block should things not go as planned, but it’s possible (and cost-effective if you know what you are doing or willing to learn).
Professionals are readily available, though, and can help speed along renovations. For many projects, homeowners can actually forego hiring a general contractor and find a local handyman instead. They tend to charge less per hour and can be easier to contact, too. Not sure which one to choose? Angie’s List offers some advice on how to select the right option for your needs.
A word of caution to those buyers on the hunt for a steal – you might be getting a Fixer Upper without even knowing it. Does that price seem too good to be true? It might be.
That home that looks brand new could have been built in 1914 and remodeled last year. Should you purchase a home like this, ask questions to determine how extensive the refurb was. Was this simply a cosmetic facelift or has the electrical and plumbing been brought up to code? Homes with older wiring and plumbing are much more expensive to insure and can be costly to maintain or update on your own.
Older homes may actually have numerous items outside of current building code. These things are generally allowed to stay as is, but once you start digging in to a remodel, any area where work is to be completed will likely need to meet present-day regulations. This can make a seemingly small update into a much larger project.
With any remodel (whether completed by the seller or you plan to tackle it yourself), be sure to contact the township or city offices regarding building permits. For work already completed, confirm that all required permits are on file before the transfer of ownership. The local government can and will come after the current owner for any renovations completed without permits. For work that you intend to complete, understand which projects require building permits to avoid fines and other issues. This can also help you determine which tasks to tackle on your own and which ones are better left to the professionals.
The Fixer Upper can be a wholly rewarding experience as it allows the buyer space for creativity as well as a strong sense of ownership. It can also bring large financial benefits for those willing to put in the work. Not certain you are up for the challenge? Don’t worry! There are plenty of perfectly fine houses out there with lavender bathrooms that just need a quick coat of paint.
One of the last steps before your loan is approved and the house keys are placed in your hands is underwriting. Underwriting is the process of risk ...
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