For some, purchasing a fixer-upper may be a dream come true. However, for others what may seem like a simple fixer-upper may end up being a bigger project than you expected to take on. With any fixer-upper there are a few key points that you always way to keep in mind, prior to finalizing your purchase. By evaluating these key points before your purchase, you can get a better idea of costs, timelines, and the extent of the work needed.
#1 Budget and Reserves
It is very easy to find a fixer-upper that is listed far below market value due to the amount of work that is needed. While this may seem like the jackpot of listings, you need to remember that the purchased/financed amount of the property is not all you will be spending. You will want to be sure to plan out a budget for the needed repairs and have these funds set aside and separate from your down payment, and other purchase-related fees.
Related: 3 Things to Never Compromise When Buying a Home
In a perfect world, you want things to always go smoothly and without hiccups, however, this is rarely the case with a fixer-upper. Due to this, it is always recommended to have some extra cash in a reserves account. These funds should only be used for damages and repairs that were unforeseen. These funds should not increase your budget but give you a cushion for any problems that may arise throughout the renovation process.
As with all good things, taking on a fixer-upper requires time. It is important to plan out a timeline of how long the repairs are expected to take and then add an extra 2 weeks. This extra time allows for a little bit of a bumper. It is always better to overestimate than underestimate. You should never rush your work, so be sure to take your time, and set a realistic timeline for the work that needs to be done.
Related: Buying Real Estate and How to Avoid a Bidding War
#3 Living Arrangements
A common misconception is that you can live in your home during construction and upgrades. While this is true in some cases, the amount of dust, equipment, and potentially dangerous building supplies can often make this more difficult than expected. It is important to evaluate that amount of work as well as the timeline to completion, and then make a decision on if you would prefer to make other living arrangements while the work is being completed or if you would prefer to stay in the home during the renovations.
If you’re currently searching for a new home, whether a fixer upper or turnkey, are searching for a qualified seller’s agent to help you list your property, or have questions regarding Camano Island real estate, please feel free to contact our office at any time.
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