Buying a fixer-upper (a property that needs remodeling or repairs) can come with many different kinds of benefits. Unlike traditional residential properties, fixer-upper prices are not as contingent on the state of the local real estate market. Nevertheless, such a purchase can result in either a lucrative deal or a disaster. Therefore, it is crucial to ensure that a fixer-upper is properly inspected. You should also learn to assess the cost of all repairs and select the correct property to begin with.
What Makes A Great Fixer-upper?
The ideal fixer-upper is a property that will be in extremely high demand someday but completely undesirable today. In most cases, homebuyers — especially first-time buyers — will not purchase a property unless it is in top condition. However, many common issues with homes that people often complain about — old and rusted furniture, peeling paint, etc. — can usually be fixed easily.
If you make a buying offer for a fixer-upper at the correct price, your earnings can begin the day of the closing date. If you flip the property and make a profit after reselling it, you can make even more money.
Here are other factors to consider when purchasing a fixer-upper.
Location is always one of the primary factors that determines the value of a home. This real estate principle also applies to fixer-uppers. A fixer-upper located next to a school, on a highly-transited intersection or near a construction zone will undoubtedly be undesirable, and thus turn a low profit, no matter how great of a condition it is in. Instead, look for fixers in up-and-coming neighborhoods.
The perfect fixer-upper will usually be one that a large family will buy (e.g. a three-bedroom home with more than one bathroom). The more bedrooms a home has, the better.
The layout of a property should also flow and not be nonsensically “chopped up.” This means avoiding homes with bathrooms too far from bedrooms, or with bedrooms at opposite ends of the house. Properties with multiple entrances to common areas are ideal, whereas homes in which dining rooms function as the central point of the home are not.
When assessing the condition of a fixer-upper, here are some easy fixes to examine:
- Patching and/or painting walls
- Refinishing floors, or laying tile or carpet
- Installing ceiling fans and new light fixtures
- Fixing broken windows
- Refacing or repainting kitchen cabinets or installing new ones
- Replacing doors
More costly and complex repairs include:
- Adding central air conditioning
- Shoring up foundations
- Replacing all sewer lines, plumbing, and electrical service
- Total bathroom or kitchen remodels
- Constructing garages or additions like patios and outhouses
It’s always important to seek out a certified home inspector before agreeing to finalize a home sale. Here are five different types of inspections to review before purchasing a fixer-upper:
- Roof certifications (If a seller has shown documentation proving the age and condition of a roof)
- Home warranty
- Pest inspections (roaches, ants, termites, rats, etc.)
- Sewer line inspections (including septic tanks)
- Engineering reports (nearby landfills, contamination reports, and other natural hazards)
One other key thing to consider when buying a fixer-upper is acquiring title insurance. This will help ensure that both you and your mortgage lender are protected against any defects that may arise related to a home, including encumbrances, unknown liens, property restrictions, public record errors and illegal deeds. If the previous owner of a home still owes back taxes, you may become responsible for these payments if you do not acquire title insurance.
Thus, make sure you acquire title insurance in order to avoid any type of financial loss.
Are You Seeking More Information About Fixer-Uppers?
Speak to the experienced professionals at Mathis Title Company in Fairfax, Virginia, to learn more about what to factor in before purchasing a fixer-upper home. Mathis provides both real estate settlement services and legal advice. Mathis also helps customers throughout several towns in Northern Virginia, including Fairfax, Alexandria, Arlington, McLean, and Great Falls. Mathis’s agents will help you create a title insurance policy and perform extensive research to ensure you obtain a clean title (free of taxes, fraud or pending lawsuits) on your property.
Mathis will also help you with contract preparation, negotiation, and review by ensuring that any contracts you take on benefit and protect you. They will make sure all documents, title, and funds transfers are legally binding. Other services Mathis Title Company provides include mechanics lien, refinancing, and settlement.
Robin Mathis has performed thousands of residential and small commercial closings and boasts experience with both the buyer and seller sides of the process. Call Mathis Title Company today or contact them online to schedule an appointment.