Buying a Fixer-Upper
What You Should Know Before Purchasing an Older Home that Needs Work
Whether you’ve got your eye on an old Victorian or classic Tudor, peel away the charming façade and you could be left with rotting walls and sinking floors. When you purchase a fixer-upper, you may be looking at significant repairs that might go on for years. Sure, the high ceilings and arched doorways remind you of a bygone era. But your thoughts will quickly come back to reality when you get the bill for a new custom door to fit that antique doorway, or the extra man-hours it takes to repair a cracked ceiling that’s 10 feet high.
You might think you’re handy. You might even have a lot of experience dealing with home repair. But before you step up that grand staircase to enter your new (but very old) home, follow these tips and walk into the deal with your eyes wide open:
- Hire an inspector before and after you sign a contract. Standard procedure is to get an inspection after the buyers accept your contract. But you need a professional to carefully examine every part of the house before you even make an offer. A licensed inspector can often see problems that you might have overlooked. When you get your report, budget for all the repairs you’ll need to make, and then base an offer on future expenses. If your contract is accepted, you can hire a different inspector to look at the property again. A new set of eyes wouldn’t hurt. Make sure the contract is contingent on a satisfactory home inspection. No matter how good the deal sounds, don't buy a home "as is." If there are major structural repairs that the seller refuses to make, don’t be afraid to walk out of the deal.
- Make a low-ball offer. Especially in this down real estate market, you have your pick of homes for sale. If the seller rejects your offer, move on. If you’re patient, the house may still be available a few months from now, and the sellers might be more willing to negotiate.
- Get to know contractors. Especially if you are new to the area, you need a list of qualified repair people quickly. Get references and don’t pay anyone upfront. Agree to half at the beginning and the rest when the work is complete. Make sure the workers are bonded and insured.
- Know your limitations. You may have planned to do all the renovation work yourself. But once you get into a project and it becomes too daunting, don’t be afraid to hire a professional. Often it’s cheaper to get the job done right the first time by someone who knows what he/she is doing.
- Over-budget for repairs. You could begin to fix leaky pipes only to find they are completely corroded. When you open up a wall, you could discover you need more insulation, or worse. Or the number of paint coats you thought would do the job end up not being nearly enough. Little things add up. Be prepared for extra expenses.
- Plan for higher utility costs. Until you fix those leaky windows and drafty doorways, you might find yourself with hefty energy bills. Get a copy of the utility statements for the past year before you write a contract. At least then, you’ll have some idea of what kind of expenses you’ll face down the road.
- Finally, don’t sweat the small stuff. If you get overly concerned with all the little things that are likely to go wrong with an old house, you won’t enjoy your new home, and buyer’s remorse will set in quickly.
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