Should You Buy A Fixer-Upper?
Buying a home can be overwhelming. Not only is it one of the biggest purchases you will ever make but there are so many things to consider. How important is a big yard? Do you require a good school close by? The options can seem endless, but one decision you will ultimately have to make is whether you want to buy an older or newer home.
There are positives and negatives for both older and newer homes. A new home has got clean carpet, fresh paint, its move-in ready and has that new house smell. On the other hand, a home like this is usually quite costly.
A fixer-upper has been around a while, and can be quite old. They have been lived-in and used. These kind of homes typically have some character, but the new homeowner usually has a long list of repairs or renovations to do.
A home like this could still have old style shag carpeting, not to mention other outdated features like the cabinets in the kitchen. The positive way to look at it is that you have the chance to add your own personal touch to the home. The price of a fixer-upper is typically lower than newer homes, and the square footage is usually higher. Keep in mind that these homes will require you to put in significant labor - don't underestimate what it will take to complete.
When considering purchasing a fixer-upper home, remember to follow these important steps:
Take the time to do the research that is needed to get a full understanding of how much labor the home will require. It won't take you much time to put a fresh coat of paint on the home or to replace the carpet, and the price for these is low considering the overall price of the home. Completely redoing the plumbing or reinforcing the foundation can be a pain and cost thousands of dollars.
The structure of the house should be sound in order to make it a worthwhile investment. If there is structural damage, antiquated wiring or plumbing, pests, or water damage, it's best to look at another home. Making major repairs like this will be very costly.
As you tour homes, make note of the items that need to be fixed, and don't forget about insurance costs. You will be required by your lender when buying a home to also purchase homeowners insurance.
Typically, if you buy an older home, it could cost you more to insure. A home is insured based on it's condition, and the insurance provider will look at the plumbing and electrical carefully, as well as the heating and air conditioning, and how old the roof is. For good reason:
An older roof is more prone to leaks and structural weakness. Older plumbing is subject to leaks that can lead to long-term water damage. Outdated electrical systems - particularly those that use fuse boxes and ungrounded power outlets - are a major fire risk.
It's a good idea to talk to your home insurance provider before considering purchasing a home with issues in these important areas. Remember, you'll need to include those premiums - as well as renovation costs - as part of your overall budget for your home purchase. Something else that needs to be considered is that while your risk will be lower after renovation, the cost of replacing the home will increase. Don't forget to talk to your insurance agent about the renovations you're planning in order to maintain the level of insurance that you require.
If you think you've found the perfect house, don't rush into it and never put in an offer on an older house without out making it conditional on a home inspection. A home inspector will be able to see damage that is concealed or otherwise hard to find, and this will protect you from moving in and then finding that the structural damage to your home is severe because of termites or something else that you didn't notice yourself.
There are positives and negatives for both older and newer homes. A new home has got clean carpet, fresh paint, its move-in ready and has that new house smell. On the other hand, a home like this is usually quite costly.
A fixer-upper has been around a while, and can be quite old. They have been lived-in and used. These kind of homes typically have some character, but the new homeowner usually has a long list of repairs or renovations to do.
A home like this could still have old style shag carpeting, not to mention other outdated features like the cabinets in the kitchen. The positive way to look at it is that you have the chance to add your own personal touch to the home. The price of a fixer-upper is typically lower than newer homes, and the square footage is usually higher. Keep in mind that these homes will require you to put in significant labor - don't underestimate what it will take to complete.
When considering purchasing a fixer-upper home, remember to follow these important steps:
Take the time to do the research that is needed to get a full understanding of how much labor the home will require. It won't take you much time to put a fresh coat of paint on the home or to replace the carpet, and the price for these is low considering the overall price of the home. Completely redoing the plumbing or reinforcing the foundation can be a pain and cost thousands of dollars.
The structure of the house should be sound in order to make it a worthwhile investment. If there is structural damage, antiquated wiring or plumbing, pests, or water damage, it's best to look at another home. Making major repairs like this will be very costly.
As you tour homes, make note of the items that need to be fixed, and don't forget about insurance costs. You will be required by your lender when buying a home to also purchase homeowners insurance.
Typically, if you buy an older home, it could cost you more to insure. A home is insured based on it's condition, and the insurance provider will look at the plumbing and electrical carefully, as well as the heating and air conditioning, and how old the roof is. For good reason:
An older roof is more prone to leaks and structural weakness. Older plumbing is subject to leaks that can lead to long-term water damage. Outdated electrical systems - particularly those that use fuse boxes and ungrounded power outlets - are a major fire risk.
It's a good idea to talk to your home insurance provider before considering purchasing a home with issues in these important areas. Remember, you'll need to include those premiums - as well as renovation costs - as part of your overall budget for your home purchase. Something else that needs to be considered is that while your risk will be lower after renovation, the cost of replacing the home will increase. Don't forget to talk to your insurance agent about the renovations you're planning in order to maintain the level of insurance that you require.
If you think you've found the perfect house, don't rush into it and never put in an offer on an older house without out making it conditional on a home inspection. A home inspector will be able to see damage that is concealed or otherwise hard to find, and this will protect you from moving in and then finding that the structural damage to your home is severe because of termites or something else that you didn't notice yourself.
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