You’re on the market for a house. You don’t want to spend a lot of money. As such, you’re looking into buying a fixer upper.
However, before you pull the proverbial trigger, you want to make sure that you’re making the right decision. That’s why you’re reading this article: you need a little information on how to buy a fixer upper.
The good thing is that we have the information you need. Read on to learn more about buying a fixer upper home.
Obtain the Right Kind of Financing
Odds are, you’re going to purchase your fixer upper with financing or a mortgage. Note, however, that conventional mortgages won’t enable you to make all of the updates that you need to make.
Instead, you’ll need to find a renovation loan. These are provided by both government and private institutions. In most cases, they cover the cost of the purchase as well as the cost of future repairs.
If you’re house flipping, you’ll be excluded from some of these loans. Read up on different loan types to see what you’re eligible for.
Be Wary of Expensive Fixes
The key to buying a fixer upper is to buy one that needs only cheap and simple fixes. This way, you can get the home at a reduced rate and still update it at a bargain price.
What you want to avoid are homes that require expensive fixes. These include things such as HVAC replacements, roofing replacements, siding replacements, foundation repair, and extensive remodeling. The cost of these repairs can drive up your overall costs substantially and, in some cases, negate the reason for buying a fixer upper in the first place.
Have It Inspected
Whether you’re buying a fixer upper or a ready-to-go house, you should have it inspected by a professional. There are all sorts of problems that could be hiding under the surface. Only a professional inspector will enable you to identify these problems.
Inspections can be used to justify paying a lower price. They can also be used to justify backing out of the transaction. On the other hand, if you don’t have the place inspected, you could get stuck with a money pit of a home.
Hire a Real Estate Agent
You may think that the purchase of a fixer upper won’t benefit from the help of a real estate agent. But in all likelihood, it will.
In fact, due to the uncertainty surrounding a fixer upper, having a real estate agent on your side can be even more beneficial. Your agent can use their resources to ensure that you’re getting a good deal, allowing for the smartest purchase possible.
Buying a Fixer Upper Can Be a Great Decision
After all is said and done, buying a fixer upper can be a great decision. But you can’t go into the process willy-nilly. You must use the information in this article to ensure the best and most cost-effective purchase possible.
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