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Should You Buy That Fixer-Upper?

Should You Buy That Fixer-Upper?

A man is fixing the roof of a house

Buying a fixer-upper can help a home buyer get a great deal on a new home. However, doing so may come with serious repercussions if the home buyer does not do proper research and understand what the process entails. From accurately evaluating the need for repairs, to ensuring the home’s price is low enough to bring a profit after the purchase, buyers need a clear understanding of what they are facing before purchasing a home that needs a lot of work.

Proper Home Valuation Is Needed

First, before purchasing a fixer-upper, the buyer needs to have a clear understanding of the value of the home based on the market value of similar homes in the area. Many buyers are investors who flip fixer-upper homes for profit, and determining a home’s estimated market value after renovations can help them determine whether a fixer-upper is worth the investment. Buyers can partner with a real estate attorney to compare the listing and its price to similarly sized homes in the area to see what its potential value would be.

Evaluating the Repairs Needed

Next, before buying a fixer-upper, buyers need to have a clear understanding of what improvements are needed and how much those improvements will cost. Sometimes, a fixer-upper just needs a few cosmetic repairs. Other times, it needs structural repairs or serious rehabbing. The cost of the repairs must be offset by the discount on the house to make a fixer-upper worthwhile.

Considering DIY Versus Professional Repairs

A buyer should also evaluate his or her ability to make DIY repairs versus the need to hire a pro for certain projects. A real estate attorney can help clients evaluate which repairs require a pro for local building code reasons, and which can be set aside for DIY repair. For projects that need to have professional attention, the cost will be higher. Buyers can survey potential contractors to see what the estimated costs will be.

Determining the Time Frame

Finally, a buyer needs to evaluate how long he or she can stand to have the home in disarray while the repairs are underway. For buyers who need to live in the property, the ability to deal with disruption must be considered, because home repairs are messy and can take considerable time. If, after weighing these pros and cons, a buyer decides a fixer-upper is the right choice, a real estate attorney is a good resource to turn to for help with the investment.

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