As more and more buyers enter the fold, many are considering whether to go for a move-in ready home or search for a fixer upper.
“Fixer uppers are literally everywhere, even in wealthy enclaves,” says Barbara Wolcott, Chairman and CEO of Berkshire Hathaway HomeServices Towne Realty. What sets them apart is price. “They have lower market value than other houses in the immediate area because they have either been poorly maintained or abandoned,” Wolcott explains.
To determine if a property that interests you is a wise investment will require a lot of work. You will need to figure out what the average home in the area sells for, as well as the cost of the most desirable ones.
Experts suggest that novices avoid run-down properties needing extensive work. Instead, they recommend starting with a property that only needs minor cosmetic work—one that can be completely refurbished with paint, wallpaper, new floor and window coverings, landscaping, and new appliances.
“Keep in mind that a home price that looks too good to be true probably is,” Wolcott cautions. Find out why before pouring your hard-earned money into it.
One of the best ways to figure out what the home is worth is to get your hands on a comparative market analysis. See what price similar properties have sold for in the past and find out the listing price of others currently on the market.
“It is important to examine the fixer-upper carefully and figure out how much it will cost to fix any defects or repairs,” suggests Wolcott. If you are unable to get in, talk with nearby neighbors about the home’s condition.
Wolcott notes that you can also do your own cost comparison by researching comparable properties recorded at the local county recorder’s and assessor’s offices, or at Internet sites specializing in property records. If the property is in foreclosure, you should get as much information as possible from the lender.
When looking for a fixer-upper, some experts suggest you follow this basic strategy: find the least desirable home in the most desirable neighborhood. Then decide if the expense that is needed to repair the property is within your budget.
So-called “bad” areas—often described as those that are residentially unstable or poor—have offered an affordable means of homeownership for many—particularly young, first-time buyers and low- to moderate-income families interested in a home they can call their own. Whether it is right for you to buy a fixer-upper will depend on your personal threshold for risk and your level of tolerance. That said, however, many run-down neighborhoods, particularly those close to downtown, are benefiting from a residential resurgence as an influx of newcomers jump-start what were once staid, unsafe, or depressed areas.
For more real estate information, please contact Berkshire Hathaway HomeServices Towne Realty at firstname.lastname@example.org, 888-737-9246, or Berkshire Hathaway HomeServices Towne Realty.