What to Consider When Buying a Fixer-Upper

Have you seen all those home renovation shows? You know, the ones where a cool, trendy couple finds a less-than-desirable house in the perfect neighborhood and embarks on a quest to turn it into a dream home. They always start the show looking helpless, but end the show ready to grace the cover of every home and garden magazine.

Well, I’m addicted to those shows. If I could watch them all the time I would. I now dream of buying the worst house on the best block and then turning it into something Martha Stewart would be proud of.

The problem? Those shows have also given me unrealistic expectations.

The expandable budgets, two-week timelines and large work crews on many of those shows are not luxuries most of us have. But even without those things, you can still turn the house that needs a little TLC into your dream home.

There are just a few things you’ll have to think about first.

Starting to Look

When you’re starting to look for a home, it can be hard to see past the worn linoleum flooring or the wood paneling on the walls. But these are easy fixes.

Real estate broker Ali Berry says, “I tell my clients to keep an open mind and look at the layout of the house. The paint, carpet, floors, cabinets, etc., can be changed relatively easily. The main things you want to look for are a great layout, good bones, no foundation issues and good mechanicals (heating and cooling systems, water heater, water pump, etc.). Cosmetic things can be changed, but the flow of a house cannot; well, not without spending a fortune, that is.”

The cosmetic things are easy to spot, but it’s hard to know if the house has foundation problems or a working heating and cooling system during a walk through.

Getting an inspection will help diagnose some of those bigger, more expensive problems.

It can be tempting not to spend the extra money on an inspection and put money into getting rid of that wallpaper from 1972 instead, but it’ll be worth it. An inspection will give you peace of mind that you’re not going to have any big issues arise during renovation that will take up more time and money. Or if there is an issue, you can either go into renovation knowing that, or you can walk away from it.

Putting In an Offer

Couples appear on renovation shows and say they have a $300,000 budget, but then they need to knock down a wall and fix some foundational issues, and suddenly they have an extra $15,000.

That’s not a reality most people live in. That’s why it’s important to figure out your budget beforehand – and stick to it!

Once you find the house you want that’s in your price range, This Old House has a simple equation to figure out how much you should offer.

Add up what it would cost to renovate the property. Be generous on this estimate. Take into consideration all the materials and labor it will take to make this house your home. Subtract that from what the value will be after renovation. You’ll find this out by looking at comparable houses in the neighborhood.

They also advise adding an extra 5% to 10% for any problems that might arise or things you decide to add during the renovation. If there’s one thing the reno shows have taught us, it’s to expect the unexpected.

Once your offer has been accepted, you’re ready to start the renovation.

The benefit of buying the fixer-upper is that you get to make it your own by putting your own touch on the house.

Have you purchased a fixer-upper? What was your experience like? Share your story in the comment section below.