6 questions to ask before buying a home in need of repair
There are lots of reasons that a potential homeowner might opt for a fixer upper instead of a move-in ready home. The biggest of these motivators tends to be the ability to buy a home below market value and create a space that reflects the homeowner’s tastes.
Determining whether or not to buy a fixer upper ultimately boils down to the individual. Here are six questions to ask before purchasing a home in need of serious TLC so that you don’t find yourself tied to a money pit.
1. What kinds of fixes does the home need?
Cosmetic fixes such as wallpaper removal and repainting cabinetry are often tasks that can be tedious, but nevertheless, can be accomplished by an amateur with some elbow grease and spare time. If you’re looking at fixes such as a new HVAC system or foundation repairs, it’s worth taking a hard look at the numbers to see if the purchase makes sense.
2. How much time do you have?
If you’re already working full-time, coaching your child’s soccer team and leading a book club, do you really have time to renovate an entire home, doing most of the work yourself? This holds especially true if you’re on a time crunch to move in, as living in a construction zone can be rather unsettling (as can microwave dinners and cold cuts for the next six month).
3. How much money do you have?
Oftentimes, you can finance home improvements with your mortgage loan. This can be a great way to get the money you need to help breathe new life into a tired home, especially when projects add to the value of the home.
Just be sure to do your homework on the costs – add a little padding for unexpected budget overages. However, if immediate fixes are needed and your line of credit is tapped, you may want to forego the purchase for something that is more in line with your budget.
4. What does the home inspector’s report say?
A home inspection will provide you with a detailed analysis about a property, including any red flags about features of the home that need immediate attention. It’s well worth the few hundred dollars to have this done on any property you’re strongly considering the purchase of so that you understand its immediate needs and are able to determine whether it’s the right property for you.
5. What is the neighborhood like?
One of the most important factors in determining the price of a home is its location. Is the house available at a bargain price because of its proximity to the city’s garbage dump or simply because the previous homeowners didn’t care to spend the time or money on cosmetic things such as landscaping and staining their deck? The neighborhood’s crime rate is also worth researching.
6. What would the walls say if they could talk?
Disclosure laws vary by state and it is not always mandatory that a potential buyer be informed if the home’s owner is in prison or if a death has taken place in the home. Ways of verifying a home’s past include talking to neighbors and checking city records and police reports.
Buying a home can be a life-changing decision and nowhere is this truer than when buying a property in need of TLC. It’s okay to take a step back and carefully evaluate the pros and cons of the specific property you’re considering so at the end of the day, the decision you make is right for you and your family.