Fixer-upper buying process
What Is A Fixer-Upper?
Usually a fixer-upper property is older and needs substantial repairs and renovations. These repairs can be anything from cosmetic improvements to a major renovation. A fixer-upper property is generally sold for less than market price.
Is a Fixer-Upper Right For Me?
Buying a fixer-upper is a big time commitment for both first-time homebuyers and for investors. Each property is different, there is no such thing as the perfect fixer-upper, unless you're familiar with renovations.
Get A Home Inspection
A qualified home inspector provides a detailed report on the house so you have a general idea of the condition. Don't let cosmetic flaws deter you from a home you love because things like windows, paint, trim and fixtures can be easily fixed. Instead, focus on major components of a home like roofing, foundation, bathrooms, kitchen, electrical, and plumbing, to name a few, that might you might need to budget for.
Estimate Renovation Costs
To prevent costs form spiraling out of control, you need a home renovation budget. There are a lot of repair estimators out there, so ask your friends and co-workers if they've done repairs lately and could tell you how much they cost. There is no denying that a fixer-upper needs work, so DIY whenever possible which can save you a lot of money. After all, contractors can be pricey.
Find The Right Financing
There are many ways to finance a fixer-upper, including special mortgages, loans, or grants. Here are some examples of common programs that can help finance a renovation project.
- FHA 203(k) Rehabilitation Loan
- Fannie Mae HomeStyle Loan
-Freddie Mac CHOICEReno eXpress
- Freddie Mac CHOICERenovation Mortgages
- VA Loan
- USDA Renovation Loan (Rural Areas Only)
Benefits & Drawbacks
Benefits - Often priced lower, a chance to personalize the home
Drawbacks - Expensive renovation, Unexpected issues, Significant time investment
