There is something charming and nostalgic about old houses. They evoke a lot of sentiments, which at times can make people take a bad decision. If you want to buy an old house and fix it to its original state, do not let the low market price tempt you into making a rash decision. Instead spend time evaluating and understand what you are getting into. This will give you a clear idea about the cost of renovation, the actual value of the property and the type of neighborhood the fixer-upper is located in. If you are satisfied and know you can handle the associated costs, go right ahead and take the plunge. Otherwise move on. You will find many fixer-uppers.
Here are some things that you should do before you sign on the dotted lines.
First get the fixer-upper assessed, so that you have a fair idea about its condition and the extent of renovation required. If the house requires significant renovations, it is best to avoid buying it. On the other hand, if you thing the renovations are not major and you can afford them, it may make sense to buy the house and fix it. But you need to take into account all the money you will be spending in doing up the house before you decide to buy it.
Most fixer-uppers have worn out roofs and usually a substantial spending is required for replacing the roof. Try and ascertain the life of the existing roof and then get quotes from different contractors to get an estimate of the repair costs.
Dry rot is a common problem with old houses, so your fixer-upper will also have some extent of dry rot. Get a qualified person to check the extent of the rot and find out what it will cost you to get it fixed. Usually, if you are using mortgage to buy the property, you would need to get the areas with dry rot fixed and repaired.
This is one aspect that you should never ignore, as exposed subflooring is a safety concern. If the subfloor is exposed, you can be certain that your loan application will be stopped. So make sure that the subfloor is in good condition.
If you spot pest and termite damage then there is a serious problem and it will need to be fixed. You will need a professional to assess the damage and give you a quote on how much it will cost you to fix the damage wreaked by termites and other household pests.
Exposed wiring is a health and safety hazard and before you get the property appraised, this should be fixed without fail, if you do not want your mortgage application to be rejected.
The buyer or seller can pay for the repairs. Usually, if you are buying the fixer-upper, you would have to foot the cost. However, if you are good at negotiating, you can always get the seller also to pay a part, so that your financial burden eases.
While the price of the fixer-upper can be attractive, it is best to avoid homes that require extensive renovations. Try to pick one that needs minimal improvements, such as drywall repairs, paint touchup and floor refinishing. You also can update the bathroom and kitchen to ensure the property fetches a good price when you sell it. If you are using a loan to buy the property, you will need to get the repairs done, as it is only then that the lending institution will feel that the fixer-upper is worthwhile and risk worthy.
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