Home prices have been on the rise since before the pandemic. In the last two years, prices have grown at a much quicker rate, especially just last year alone. Some buyers are finding themselves unable to afford certain homes or compete in bidding wars over them and have switched their buying interests to homes in need of repair.
The sale of homes needing repairs rose significantly last year as compared to the year prior at a rate of 13.4%. As most of the competition among home buying stayed with move-in ready homes, there were many buyers who turned their interest to homes in a state of significant disrepair to avoid some of the bidding wars.
Buyers Should Not Rush to Purchase a Fixer Because it Has a Lower Price Tag
“This is not a purchase to be made lightly, however, just because someone really wants to buy a home. There are many risks involved in home repair and many times getting to the finish line ends up costing more money than you expect,” says Pam Pester, Commercial Real Estate Agent in Tampa
Another twist to purchasing a fixer-upper right now is the difficulties found in home renovations currently. These include a low supply of materials and soaring costs as well as much longer waits to get anything accomplished.
Before deciding to switch a home search to a home that needs a lot of work to get ahead of the competition, a buyer needs to be well aware of what that entails. You don’t want to end up in buyer’s remorse because the project of home renovation can become draining and stressful in its own regard.
Make Sure You are Well Aware of the Details Before Making an Offer
Before purchasing a fixer-upper make sure that you have the funds, patience, and a plan for how and who will do the work. If you plan to do it all on your own and are not well versed in the aspects of home renovations or the impact they have on the home value you will want to have a long talk about your plans for a property with a professional. You want the best advice possible on what it would truly look like to get a home put together in the way that you envision. You also want to consider if the changes you want to make to the home will be smart ones should you decide to sell it someday.
A home full of overly personalized styling or mediocre finishes may not bring you the best return on your investment dollars. When planning to resale homes in the future after renovating the best plan is to keep things neutral, timeless, and classic with a fair amount of quality so that they are appealing to buyers in the future.
Purchasing a fixer up is not a horrible idea, and it can save a buyer a great deal of money. It may even be met with much less competition as many buyers would prefer to move to a home that is ready to go and easy to fall in love with at first sight. You just want to make sure that you have the right real estate professionals on your side to help you see if a rough house really is a diamond in the rough, or merely one that might be better off sold to an investor or someone with a construction background, a person with more expertise and money to make repairs.
Additional: 10 Things to Put on Your Final Walk-through Checklist