When you conduct your home search you will usually find a variety of homes that are on the market for sale. Some that have been completely renovated from top to bottom, some that need a short list of updates and those that are true “fixer uppers.” Prices for these homes should be adjusted accordingly and if you are considering one that needs a lot of work, there are some things you should take into consideration. Here are 4 helpful tips for buying a home needing significant updating.
Your own capabilities
The first question is how much of the work can you do yourself? Are you skilled at hanging drywall or is a family member a professional in a helpful trade? Being able to do work on your own is certainly going to save you big, but only attempt this if you truly know how to do things the right way, safely and to local code regulations. Aside from your skill set, factor in if you have the time to do these projects as well with work and personal life obligations.
Before you solidify any deals, check with reputable contractors and get some firm estimates on the work that is needed. Choose your contractors wisely as well. Talk to friends, neighbors or family members for referrals and read reviews. Once you have a firm grasp on what is needed to invest in the home, craft your offer accordingly. You may even get the current homeowner to do some of the repairs on the list.
If you are getting a mortgage or home loan then a home inspection will be a definite. For any who are doing a cash deal, a home inspection is still a wise idea. There will certainly be the obvious needed repairs, but a home inspector will provide you with the best knowledge possible and arm you with what you need to know for making a deal that makes sense.
Once you have done your due diligence and research for pricing out necessary repairs, you will want to account for one last thing – a variance for the unknown. Unexpected circumstances will certainly come about during the process of renovating. A good rule of thumb is to add a cushion of between 5 and 10 percent of the anticipated costs to cover any of these surprises.