You're ready for a new house, but the perfect property might not be ready for you. Will you wait for that move-in-ready dream home, or will you create something fresh by renovating a fixer-upper? If you're considering the latter option, you need to evaluate the pros and cons of that approach.
The real estate market can be incredibly competitive, but fewer prospective buyers are interested in the time and effort that goes into renovating a fixer-upper. Purchasing a fixer-upper can help you avoid a drawn-out process of making offers, waiting, and repeating after a competitor’s offer is accepted.
The offer is the primary barrier between you and your new property, and a home that requires renovation will always have a lower purchase price than a comparable move-in ready house, and since property taxes are based on a home’s purchase price, you have an opportunity to save twice.
That lower initial purchase price can be your potential gateway to a desirable neighborhood that is otherwise out of your price range. The homes surrounding yours can have a huge impact on resale value.
Maybe the greatest benefit to buying a fixer-upper is the opportunity to personalize every little detail of your new purchase. Knock down a wall. Pick ornate finishes. Place built-ins everywhere. When you purchase a blank slate, all the details are yours to fill in.
The lower purchase price doesn’t lower a buyer’s risk. In fact, a fixer-upper may increase your risk profile. Houses that need renovation often have hidden costs. Pulling up flooring might reveal asbestos. Lead-paint gets revealed. These items and more all require expensive and immediate mitigation. This is one of the reasons that 4 out of 10 fixer-upper projects go over budget.
An additional risk that many buyers overlook is carrying costs. You may be able to execute minor renovations while you live in a home, but any larger projects will require you to be in a separate residence, forcing you to carry two payments at once. And if a major life-change happens before you are able to complete the renovation, selling a home stuck at an in-between stage can be extremely difficult.
The risk of having to sell a home before the renovation is complete is very real, because finishing a fixer-upper is a very time-consuming process. Can you and your family commit to what is essentially a part-time job in addition to your current schedule? If not, then you may need to look at a move-in ready option.
Whether you are a first-time buyer, an experienced homeowner, or an investor looking to enter the world of real estate, there are myriad factors that go into matching people and properties. A professional realtor is the matchmaker to guide you through that process. Contact Jessica & Sarah today to discover Eastern Iowa’s best homes, selected just for you.