What To Know Before Buying That Fixer

1. Know that some flaws can be fixed

Fixer-uppers generally fall into two categories: a total fixer and just ugly.

An ugly house is full of cosmetic issues. Its paint is chipping away, the yard is unkempt, inside it may smell bad. In short, everything about it needs freshening up. These are the kinds of flaws that are easy to fix. They’re merely cosmetic. Painting is the easiest task that you can do yourself. Just don’t cut corners—buy all the right equipment (use the tape!) and paint correctly, with the right number of coats. It’s extra work, but it pays off in the end. Even if you hire a painter, it won’t cost as much as remodeling a bathroom, for example.

2. Then again, other flaws cost a bundletips for buying a fixer upper in san diego

On the other hand, more major problems could be with the foundation, structure, roofing, and siding can be expensive to fix. Major replacements with sewage, and heating, ventilating, and air-conditioning systems. Replacing decks and driveways can also be costly. Sometimes environmental problems such as a wet basement or mold can be mitigated, but treatments are not always successful. In some houses, it can just be impossible to solve a bad mold problem.

3. Guesstimate your renovation costs

Hire a home inspector to evaluate the home before you buy—but before you even get there, do your research. There are a lot of repair estimators out there, so ask your friends and co-workers if they’ve done repairs lately and could tell you how much they cost. That way, you can quickly determine whether the repairs would fall within your budget. Draw up a reference sheet for renovation costs such as roof, foundation, HVAC, and windows. This will help you to determine a fair offer price based on your renovation costs.

4. Ask for a discount—gently

tips for buying a fixer upper in san diego for discountNow on to the real upside of buying a fixer-upper: big savings! These houses can go for tens of thousands off similar homes in the neighborhood. This is especially true if the home has been sitting on the market, or if you’re able to offer cash upfront. Of course, even if it’s obvious this house is a mess, that doesn’t mean the sellers know that, or want to hear it. To avoid insulting them, start out by saying you love their home, but you (or your engineer, inspector, or friend) have noticed some issues that will take time and money to fix. Then subtract that sum from their asking price.

The bottom line: The more you break down your expenses, the more sense your offer will make to the sellers, who will hopefully play ball.

5. Get the right kind of loan

A home requiring major renovations can qualify for a special type of financing called a renovation loan. There are different types: A FHA 203K loan is one of the most popular. Since these loans are backed by the government, lenders are fine accepting lower interest rates than what would be required by your typical home renovation loan; they’re also open to people with lower credit scores. However, there’s a limit to how much you can borrow. In San Diego, it’s currently $562,350, but varies by region. Be sure to explore all your options with your Realtor or other qualified experts.

So, if you’re thinking about investing in a fixer-upper, make sure you do your homework first!


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