Use These Tips To Determine Whether It's Worth Investing in a Fixer-Upper
Found fixer-upper? Follow these seven tips to determine how much it will cost to renovate, how much you can afford, how much to offer, and whether investing in a fixer-upper home is right for you.
•Assess what you can DIY - Tasks like stripping wallpaper or painting are easy enough for amateurs. Advanced work like electrical is best left to the professionals.
•Get a quote for the renovations before making an offer - Have the contractor do a walk-through or at least price the supplies if you plan on doing the work yourself.
•Check the cost of permits.
•Double-check the price of major structural work - Hiring a structural engineer is a good idea if your fixer-upper needs significant structural work. Remember to get all quotes in writing and don't invest in this type of property unless it's at a steep discount.
•Budget for your down payment and closing costs - Special financing options for fixer-uppers are available. Request more information from your trusted mortgage professional.
•Calculate a Fair Market Offer - Work with a real estate agent to help you figure out a fair offer.
•Include Inspection Contingencies - Most home inspection contingencies let you go back to the seller to ask them to do the repairs or pay for the repairs. Alternatively, you could back out of the deal if the inspection reveals something you don't want to deal with.