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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
Fixer-Uppers Vs Move-in Ready Homes
Sometimes when you get out there and start thinking about home shopping, you get a little sticker shock when you see how much these homes cost, whether it is new construction or a resale home.
You wonder what happened to these more affordable homes, where are the fixer-uppers in the market?
And should I buy one to make it my dream home? Only you can decide that, so today we will discuss buying fixer-uppers vs buying move-in ready homes and which one is right for you.
Buying a Fixer-Upper
Buying fixer-upper is a good idea at least to consider Right? Let us face the fact that no new home is going to be everything that you wanted until you put your touch on it anyway.
So if you are going to do all that work to the home, why not put some more in a fixer-upper home and get the value of the house more close to any move-in ready home in the same area or community that you are planning to buy.
Estimating the Renovation Cost
First thing! You got to be real with yourself about how much it is going to cost to renovate that house.
This is where a lot of first time home buyers in general or even investors make a mistake by underestimating the project cost. There are many tools to estimate the cost.
When you find that home that you really liked, based on your unique vision you have for your dream home, there is nothing better than having a general contractor go with you and give you the cost.
Doing so will provide you with an excellent idea of how much it is actually going to cost, fix it up, and make sure you have that money in the bank, and plan accordingly.
Be Budget Ready
The second thing a lot of people miss is under budgeting for the cost of renovations.
If you don’t have enough cash in your hand and in the bank for these renovation projects, there are other options, and you may want to review them with your trusted loan officer.
One of them is called a “203k loan”. It is also known as a “Renovation Loan.” There are different rules and conditions applied to them.
Sometimes they look better than they are, and sometimes they might be right up your alley.
The only way to make sure of it is to talk to your trusted loan officer and make sure you have a full understanding of how that loan program works.
Knowing The Cost Over-runs
This is the next biggest mistake a lot of people would make when they buy a fixer-upper.
Not only ensuring that they have enough money or they have understood what the project cost would be but also not accounting for specific facts like when you renovate your property some times you have cost over-runs depending on what was done to the house previously.
The best solution to this is to estimate the cost of 15 to 20 percent on the higher side of whatever the quote was.
When you go in with that mindset, you would be really well prepared for buying a fixer-upper home and make sure that your fixer-upper is done just the way that you want.
Locating A Fixer-Upper
When you start looking for the fixer-upper, you might need tools or help from your trusted real estate advisor.
Generally, the houses which are there on the market for a more extended period of time are the ones with the most problems.
These houses are on the market for a long time could be there for three reasons. First, maybe the house is really outdated and needs a lot of updating.
That might be an excellent opportunity for a fixer-upper as the fixing-using is just to update the home to your taste.
The second reason for a house to be on the market for a long time is because it was priced too high. The best thing to do in such a case is to get in touch with the listing agent to know more about the specific property.
The third reason might be that the house is in a teardown situation. Investing in such property may not be a benefit as you might have to put in a lot of money to fix such houses.
Buying a Move-In Ready Home.
Now let us discuss ‘move-in ready’ homes and some pros and cons that come with it. The most significant advantage is that you do not have to worry about fixing anything in the house. Just pack your furniture and stuff and move in.
It is easier to get financing on the move-in ready homes. The disadvantage of buying a move-in ready home is that they are priced higher in the market.
Trade-Offs of Move-In Ready Homes
There are some critical things to think about as a trade-off when you are looking at move-in ready homes.
You want to pay particular attention to the craftsmanship of what was upgraded in the home and make sure that the house has good bones.
This could be easily acquired by the local home inspector who can share this information with you before you make a decision.
Conclusion
Most homes are never going to be perfect until you decide to put your touch, your furniture, and make it your own.
Just keep that in mind whether you are buying a fixer-upper or a move-in ready home the idea to share this information with you here now is so that as you evaluate your home options, you can find that which is most comfortable.
Finally, you can say, “I am happy. I bought that house.”
