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Affordable move-in ready homes are in hot demand, leaving many prospective homebuyers waiting for their opening. A fixer-upper property may be a solution, allowing people to purchase a home in a desired neighborhood and customize it to perfection. Let’s look at what a fixer-upper is and the pros and cons of purchasing one.
A fixer-upper is a home that requires large maintenance work. Because they require more work, they are often sold at a lower purchase price than neighboring properties.
Occupying in a fixer-upper during upgrades can be stressful, with certain spaces being inoperable or unavailable for several months. Living in a home with construction zones, noise, and workers may be too disruptive for some people.
During structural repairs or upgrades, you may have to live elsewhere until work is completed for safety. Some buyers may live with family while others get a temporary rental unit or hotel.
According to experts, four out of five homebuyers that purchase fixer-uppers overspend from their original budget. Hidden problems with the home, finishes, labor delays, and material delays are all common reasons someone may go over their initial funds. To combat this, experts advise homebuyers give themselves an additional 10-20% for budgeting wiggle room.
ROI, or return on investment, is a ratio used to evaluate the financial profitability of a home’s renovations and upgrades. Some renovations or upgrades have higher value than others. A seller of an updated fixer-upper may find that some of their most beloved additions don’t align with other homebuyers’ needs or the appraised value of the home.
When house hunting for a move-in ready home, homebuyers may need to determine what’s necessary for their lifestyle (a need) and what they could live without (a want). However, you may not have to compromise with a fixer-upper.
A fixer-upper can be a wonderful way for a person to build their dream home. You have the freedom to renovate or create spaces that perfectly align to your needs and wants.
When comparing the purchase prices of a move-in ready home with a fixer-upper, the fixer-upper will generally have a lower price. Homebuyers are willing to pay more money for a home that has working appliances, HVAC systems, lighting, and the other features associated with a move-in ready home.
Buying a fixer-upper has never been easier with the help of renovation loans. Rather than juggling a mortgage and a home improvement loan or having to pay out of pocket for improvements, a homebuyer can rest easy knowing they only have one monthly mortgage payment.
If you’ve been considering buying a fixer-upper or a home in need of renovations, this is your sign! Depending on the type and size of your project, our diverse product offerings allow more freedom to choose what works best for you. When you’re ready to get started, contact us! Our Licensed Loan Originators are ready to make your home financing dreams come true.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.