Should You Buy a Fixer Upper?

The thought of buying a fixer-upper fills some buyers with dread; of course, others relish the challenge. The trick to coming out ahead is choosing the right fixer upper and making sure it is checked by a number of specialized home inspectors.

One of the best things about buying a fixer upper is that the purchase will not be contingent on the market temperature, because any time is a good time to buy a home that needs work -- especially when you pay less for the home than others nearby.

Buying a fixer upper has many clear advantages:

  • Lower price
  • Less competition from other buyers
  • Potential to make a profit on resale
  • Gain valuable knowledge about repairs
  • The personal satisfaction that comes from finishing the project
Fixer Upper Homes

If you make an offer at the right price, you can easily make money as soon as the transaction closes.

What is the Perfect Fixer Upper?

The ideal home is one that everyone will want to buy when fixed up, but few can see the potential due to the current imperfections. This includes worn-out carpeting, a sagging ceiling or paint that is peeling from the walls. While these issues can be easy to fix, most buyers cannot see past them, particularly first-time buyers, who usually want a home that is move-in ready.

Features to Look For

If you think buying a fixer upper is the right move, you need to do your homework and make sure you buy the right home. Here are some important features to look for:

Home condition

Of course, you should also consider the home's condition. Some buyers are not intimidated by major rehab work, but you should consider your expertise and whether you really want to tackle a major project before the home is livable.

Fixes that are Easy on the Budget

As you tour the home, take note of all issues that must be fixed, including those revealed by a
home inspection. Easy fixes that won't break the bank include:

Expensive fixes include replacing HVAC systems, fixing the foundation, reroofing that involves a tear-off,
replacing electrical, plumbing or sewer lines, pouring concrete for steps or a driveway, a complete
kitchen or bathroom remodel and adding a garage or new addition.

Important Inspections for a Home Inspection

It is always a good idea to get a home inspection before going through with a real estate transaction. When you buy a fixer upper, however, you may want to consider other types of inspections. In some cases, the seller can be asked to pay for the cost of the inspection.

Buying a Fixer Upper
  • Roof Certification:
    It is a good idea to get a roof certification at the seller's expense, if you can.
  • Home Warranty:
    Not all sellers will be willing to pay for a home warranty, but many will.
  • Pest Inspection:
    Not all states have issues with pests, but your purchase offer should be contingent on a passed pest inspection, along with seller-paid repairs for any damage caused by ants, beetles or termites.
  • Sewer Line Inspection:
    Sewer lines age along with the home, and some homes still have clay pipes and other old sewer lines that can be very expensive to replace.
  • Engineering Report:
    An engineer will determine if the home is likely to slide off its hill, for example, and notice other issues that can be detrimental.

No one can say if buying a fixer upper is the right move for you. Consider your expertise and willingness to accept a challenge -- along with the potential pitfalls -- and make sure you do the work necessary to protect yourself as best as possible.

Are you ready to save THOUSANDS when selling your home?