What to Avoid in a Fixer-Upper Home

Image: circaoldhouses.com

Have you ever considered entering the real estate investment game? Maybe you have thought about purchasing a home or homes to restore, fix-up, and flip? Or maybe you want to purchase a fixer-upper for your own use as your primary residence or a second home.

Whatever the case, if you are considering purchasing any home that needs restoration or updating, no matter the extent, there are a number of money traps and other issues to be aware of. And, unless you are a certified expert on home buying or construction, in addition to taking the following guidelines from American Lifestyle Magazine seriously, we also suggest that you have someone on-hand who can review these items.

A fixer-upper can be a great investment, especially for a new family looking to make a space their own over time. They can be a truly incredible deal, but if you don’t know what to look for and aren’t careful, it can also swallow you in a pit of money.

If you’re looking to purchase a fixer-upper, here are some of the most important conditions to consider.

A workable floorplan.

You can knock down small walls, repaint, and even refinish the floors, but removing load-bearing walls is a one-way ticket to a drained bank account. Make sure the fixer-upper home you settle on has a floorplan you love, or that you can at least work with.

Look for leaks.

A leaky roof, old piping, and a waterlogged basement are a recipe for disaster. You might love everything about a house, but if there are serious structural problems, there will hardly be any time or money left in the budget for anything else.

Check the foundation.

The same goes for the base of the home. A strong foundation is essential in keeping the rest of the house structurally sound. If there are noticeable signs of rot or crumbling, it could cost a pretty penny to fix. You’re better off finding another place with a sturdy foundation and horrible shag carpet (that you can replace)!

Watch the wiring.

Older homes will also come with older wiring, and this is something you simply cannot skimp on. Make sure you trust your inspector, as faulty or damaged wiring that goes unnoticed can not only be costly to repair later but can be extremely dangerous. Not all issues will be expensive to fix, but it’s worth looking into before you make any formal commitments to home.

For more real estate tips and tricks, visit www.americanlifestylemag.com/home.

Be a Smart Home Buyer

Image: Consumer Reports

IF you are in the market to purchase a new house, house hunting can be an exciting time. However, you should never let emotional impulses control your home buying purchase. Falling in love with a home on-line can be like online dating. It might look good at first glance but may have some flaws upon further, up-close inspection.

And, while you will obviously have a checklist of must-haves, you also need to understand that there may be items you need to compromise on. Finding a home that meets ALL the checkboxes is virtually impossible, so be willing to keep an open mind about adding some things later.

The following article from houselogic.com provides some helpful house-hunting tips to help you make smart, informed decisions during the buying process. Remember to always do your homework and make sure you have a real estate professional to represent your interests. You will be glad you did.

House-Hunting Tips to Avoid #Facepalm Moments

What to look for when buying a house — and what not to do.

The only thing more exciting than shopping for your first house is the day you move into it. And in your eagerness to get to that day, there are a bunch of opportunities to botch the shopping.

Here are some #facepalm moments and the house-hunting tips you’ll need to avoid them.

“I Saw the House Online. It’s Perfect — Let’s Make an Offer Before It’s Gone!”

Buying a house sight unseen?!? Whoa. Online photos are a fun sneak peek — and that’s all.

Before you plan marriage after the house equivalent of swiping right, consider this:

It’s the photos that aren’t in the gallery you should worry about. You won’t see the hastily patched cracks in the home’s foundation. Or the mold in the attic.
Your other senses need to evaluate the place. There could be traffic rumbling by or a stinky recycling facility downwind.
Three words: Wide angle lens. (They make small spaces look deceptively big.)

So before you make an offer, tour the place. And the yard. And the neighborhood. It’s worth it.

“I Want to Buy This House. And Look, There’s an Agent Right Here!”

While that might seem mighty convenient, it’s not in your best interests. The real estate agent at an open house most likely represents the seller.

That means they’re obligated to work in that person’s best interest. If you start blabbing about how you’re pre-approved for $285,000, but you’d rather offer $260,000, you’ll compromise your negotiating position.

As a buyer, you should contract with a buyer’s agent who works on your behalf. They’ll understand your wants and needs, counsel you based on your budget and priorities, and advise you through the negotiating process.

“I’ll Rely On an Online Home-Value Estimator.”

Google “home-value estimator,” and you’ll get pages of tools that promise you a free estimate of home value. Plug the address into the tool, some algorithms do their thing, and in seconds you know what a house is worth.

But unless that algorithm’s been poking around the basement with a flashlight, it’s a ballpark figure at best.

Home valuation is both art and science. There are nuances within the house and market that an online estimator can’t see. What if the seller made major renovations last year? Or what if houses rarely turn over in the neighborhood, so there’s not enough data to work with online?

Your agent knows current market conditions and the inventory of homes in the market — all of which help you make a nuanced offer.

Use these fun tools as a guide, but don’t take them to the bank.

“I Don’t Have Kids, So I Don’t Have to Worry About School Districts.”

Yeah … nope. School district matters regardless of your parenting status. Whether or not you have kids, a future buyer might. And neighborhoods with good school districts tend to maintain value and appreciate faster than those in other areas. People want to live near good schools, which leads to rising home values and better neighborhood amenities.

“If a House Doesn’t Have Everything On My List, I’m Not Looking At It.”

Definitely make your list. Your list is important. But use it as a starting point to help you prioritize. Because buyers who can prioritize have the most success.

They turn that list into must-haves and nice-to-haves — and they also consider which of their must-haves could turn into will-dos.

For example, you can switch laminate for quartz, but you can’t move a country home next door to your city office. Skip the listings in the wrong location, but why not check out the ones with the wrong countertops? Maybe the one thing you’d enjoy more than quartz counters is quartz counters you picked out yourself.

Not sure what should go on your list? This worksheet can help you get your priorities straight: The Ultimate “I Wanna Buy a House” Checklist.

“I’ll Figure out This HOA Thing After Closing.”

Homeowners associations (HOAs) might seem like a cute little neighborhood organization, but some have the power to limit your pets, restrict your parking, and pick your paint colors.

Since how you live is likely as important to you as where you live, read and fully understand the covenants, conditions, and restrictions (CC&Rs) before you buy. Restrictions that don’t fit your lifestyle could be as much of a deal-breaker as a crumbling foundation.

That’s not to say HOAs are bad. Oh no — they can be great at preserving neighborhoods, keeping home values high, and some give you access to amenities. But the benefits and drawbacks of each one vary, so take a close look.

The Buyer Guide

How Owning a Home Benefits You

You probably know that owning your own home can benefit you financially, but home ownership comes with a surprising number of health, wealth and social perks too. Check out these five ways home ownership could be making your life even better:

1. Homeowners report better psychological and physical health than non-owners.

2. Homeowners are far less likely to become crime victims than non-owners.

3. Homeowners are more likely to live in neighborhoods with more opportunities for school involvement or participation in neighborhood activities.

4. The average homeowner’s net worth is 35 times that of the average renter.

5. Homeowners bring stability to neighborhoods. They move far less frequently than non-owners, and hence are embedded into the neighborhood and community for a longer period.

Source: National Association of REALTORS®