{"id":545,"date":"2010-12-08T15:37:55","date_gmt":"2010-12-08T22:37:55","guid":{"rendered":"http:\/\/lorismith.biz\/blog\/?p=545"},"modified":"2010-12-08T15:43:46","modified_gmt":"2010-12-08T22:43:46","slug":"how-to-assess-buying-a-fixer-upper","status":"publish","type":"post","link":"http:\/\/lorismith.biz\/blog\/2010\/12\/08\/how-to-assess-buying-a-fixer-upper\/","title":{"rendered":"How to Assess Buying a Fixer-Upper"},"content":{"rendered":"<div style=\"letter-spacing: normal ! important; width: 400px ! important; padding: 0pt 40px ! important; font-family: Arial,sans-serif ! important;\">\n<ul style=\"letter-spacing: normal ! important; list-style: none outside none ! important; margin: 0pt 0pt 30px ! important; padding-left: 0pt; float: left; width: 485px; font-family: Arial,sans-serif ! important;\">\n<li style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; display: block; vertical-align: baseline ! important; padding: 30px 0pt ! important; border-bottom: 1px solid #ebf0f2 ! important; color: #777777 ! important; font-size: 12px ! important; line-height: 20px ! important; float: left; width: 400px;\">\n<div style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; position: relative ! important; float: left ! important; width: 100px ! important; padding: 0pt 12px 0pt 0pt ! important;\"><a style=\"letter-spacing: normal!important; font-family: Arial,sans-serif!important; color: #16a8d3!important; text-decoration: none!important;\" href=\"http:\/\/buyandsell.houselogic.com\/articles\/how-assess-real-cost-fixer-upper-house\/\"> <img decoding=\"async\" style=\"border: 0 none;\" title=\"buysell-buy-hardware-store-getty\" src=\"http:\/\/c0263062.cdn.cloudfiles.rackspacecloud.com\/content\/images\/sized\/buysell-buy-hardware-store-getty_f37bacd613442a5fb2319340e250426d__1x1_f37bacd613442a5fb2319340e250426d_jpg_80x80_q85.jpg\" alt=\"Woman looking at paint prices at hardware store\" \/> <\/a><\/div>\n<h3 style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; float: left; width: 373px; margin: 0pt; font-size: 16px ! important; font-weight: bold ! important;\"><a style=\"color: #16a8d3!important; text-decoration: none!important;\" href=\"http:\/\/buyandsell.houselogic.com\/articles\/how-assess-real-cost-fixer-upper-house\/\" target=\"_blank\">How to Assess the Real Cost of a Fixer-Upper House<\/a><\/h3>\n<p style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; margin: 0pt; float: left; width: 373px;\">When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.<\/p>\n<\/li>\n<li style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; display: block; vertical-align: baseline ! important; padding: 30px 0pt ! important; border-bottom: 1px solid #ebf0f2 ! important; color: #777777 ! important; font-size: 12px ! important; line-height: 20px ! important; float: left; width: 400px;\">\n<h3>1. Decide what you can do yourself<\/h3>\n<p>TV remodeling shows make home improvement work look like a snap. In  the real world, attempting a difficult remodeling job that you  don\u2019t  know how to do will take longer than you think and can lead to   less-than-professional results that won\u2019t increase the value of your   fixer-upper house.<\/p>\n<ul>\n<li>Do you really have the skills to do it? Some tasks, like stripping  wallpaper and painting, are relatively easy. Others, like electrical  work, can be dangerous when done by amateurs.<\/li>\n<\/ul>\n<ul>\n<li>Do you really have the time and desire to do it? Can you take time  off work to renovate your fixer-upper house? If not, will you be  stressed out by living in a work zone for months while you complete  projects on the weekends?<\/li>\n<\/ul>\n<h3>2. Price the cost of repairs and remodeling before you make an offer<\/h3>\n<ul>\n<li>Get your contractor into the house to do a walk-through, so he can  give you a written cost estimate on the tasks he\u2019s going to do.<\/li>\n<\/ul>\n<ul>\n<li>If you\u2019re doing the work yourself, price the supplies.<\/li>\n<\/ul>\n<ul>\n<li>Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.<\/li>\n<\/ul>\n<h3>3. Check permit costs<\/h3>\n<ul>\n<li>Ask local officials if the work you\u2019re going to do requires a permit  and how much that permit costs. Doing work without a permit may save  money, but it&#8217;ll cause problems when you resell your home.<\/li>\n<\/ul>\n<ul>\n<li>Decide if you want to get the permits yourself or have the  contractor arrange for them. Getting permits can be time-consuming and  frustrating. Inspectors may force you to do additional work, or change  the way you want to do a project, before they give you the permit.<\/li>\n<\/ul>\n<ul>\n<li>Factor the time and aggravation of permits into your plans.<\/li>\n<\/ul>\n<h3>4. Doublecheck pricing on structural work<\/h3>\n<p>If your fixer-upper home needs major structural work, hire a  structural engineer for $500 to $700 to inspect the home before you put  in an offer so you can be confident you\u2019ve uncovered and conservatively  budgeted for the full extent of the problems.<\/p>\n<p>Get written estimates for repairs before you commit to buying a home with structural issues.<\/p>\n<p>Don&#8217;t purchase a home that needs major structural work unless:<\/p>\n<ul>\n<li>You\u2019re getting it at a steep discount<\/li>\n<\/ul>\n<ul>\n<li>You\u2019re sure you\u2019ve uncovered the extent of the problem<\/li>\n<\/ul>\n<ul>\n<li>You know the problem can be fixed<\/li>\n<\/ul>\n<ul>\n<li>You have a binding written estimate for the repairs<\/li>\n<\/ul>\n<h3>5. Check the cost of financing<\/h3>\n<p>Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.<\/p>\n<p>If you\u2019re planning to fund the repairs with a <a href=\"http:\/\/www.houselogic.com\/articles\/consider-home-equity-line-of-credit\/\" target=\"_blank\">home equity<\/a> or home improvement loan:<\/p>\n<ul>\n<li>Get yourself pre-approved for both loans before you make an offer.<\/li>\n<\/ul>\n<ul>\n<li>Make the deal contingent on getting both the purchase money loan and  the renovation money loan, so you\u2019re not forced to close the sale when  you have no loan to fix the house.<\/li>\n<\/ul>\n<ul>\n<li>Consider the Federal Housing Administration\u2019s <a href=\"http:\/\/www.hud.gov\/offices\/hsg\/sfh\/203k\/203kmenu.cfm\" target=\"_blank\">Section 203(k) program<\/a>, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.<\/li>\n<\/ul>\n<h3>6. Calculate your fair purchase offer<\/h3>\n<p>Take the fair market value of the property (what it would be worth if  it were in good condition and remodeled to current tastes) and subtract  the upgrade and repair costs.<\/p>\n<p>For example: Your target fixer-upper house has a 1960s kitchen,  metallic  wallpaper, shag carpet, and high levels of radon in the  basement.<\/p>\n<p>Your comparison house, in the same subdivision, sold  last month for $200,000.  That house had a newer kitchen, no wallpaper,  was recently recarpeted,  and has a radon mitigation system in its  basement.<\/p>\n<p>The cost to remodel  the kitchen, remove the wallpaper, carpet the  house, and put in a radon  mitigation system is $40,000. Your bid for  the house should be $160,000.<\/p>\n<p>Ask your real estate agent if it\u2019s a good idea to share your cost estimates with the sellers, to prove your offer is fair.<\/p>\n<h3>7. Include inspection contingencies in your offer<\/h3>\n<p>Don\u2019t rely on your friends or your contractor to eyeball your  fixer-upper house. Hire pros to do common inspections like:<\/p>\n<ul>\n<li>Home inspection. This is key in a fixer-upper assessment. The home  inspector will uncover hidden issues in need of replacement or repair.  You may know you want to replace those 1970s kitchen cabinets, but  the  home inspector has a meter that will detect the water leak behind  them.<\/li>\n<\/ul>\n<ul>\n<li>Radon, mold, lead-based paint<\/li>\n<\/ul>\n<ul>\n<li>Septic and well<\/li>\n<\/ul>\n<ul>\n<li>Pest<\/li>\n<\/ul>\n<p>Most home inspection contingencies let you go back to the sellers and  ask them to do the repairs, or give you cash at closing to pay for the  repairs. The seller can also opt to simply back out of the deal, as can  you, if the inspection turns up something you don\u2019t want to deal with.<\/p>\n<p>If that happens, this isn\u2019t the right fixer-upper house for you. Go back to the top of this list and start again.<\/p>\n<p style=\"letter-spacing: normal ! important; font-family: Arial,sans-serif ! important; margin: 0pt; float: left; width: 373px;\"><a style=\"color: #16a8d3!important; text-decoration: none!important;\" href=\"http:\/\/buyandsell.houselogic.com\/articles\/how-assess-real-cost-fixer-upper-house\/\" target=\"_blank\">Read More Articles from Houselogic<\/a><\/p>\n<\/li>\n<\/ul>\n<div style=\"float: left; width: 400px;\">\n<p style=\"letter-spacing: normal!important; font-family: Arial,sans-serif!important; margin: 0 0 12px!important; color: #000!important; font-size: 12px!important;\">\n<p style=\"letter-spacing: normal!important; font-family: Arial,sans-serif!important; margin: 0 0 12px!important; color: #000!important; font-size: 11px!important;\">Copyright 2010 NATIONAL ASSOCIATION OF REALTORS\u00ae<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>How to Assess the Real Cost of a Fixer-Upper House When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix. 1. Decide what you can do yourself TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[214,174,212,46,10,39,175,213,96,269],"class_list":["post-545","post","type-post","status-publish","format-standard","hentry","category-real-estate","tag-bank-owned-properties","tag-blog","tag-buying-a-fixer-upper","tag-colorado","tag-estes-park","tag-estes-park-buyers-market-home-sales","tag-estes-park-real-estate","tag-foreclosed-properties","tag-homes-for-sale","tag-real-estate"],"_links":{"self":[{"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/posts\/545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/comments?post=545"}],"version-history":[{"count":10,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/posts\/545\/revisions"}],"predecessor-version":[{"id":602,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/posts\/545\/revisions\/602"}],"wp:attachment":[{"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/media?parent=545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/categories?post=545"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lorismith.biz\/blog\/wp-json\/wp\/v2\/tags?post=545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}