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Buying a Fixer Upper

By Derren Peters

Fixer uppers are homes that require a bit (sometimes more than a bit) of maintenance. The level of work needed will vary from home to home. Because of their price, fixer uppers will catch the eye of buyers throughout So Cal looking for an inexpensive property. Put the price tag aside, and consider your family and financial situation first. As with any product that is "well used," there are many potential pitfalls involved. A home requiring a major overhaul may not be the right fit for a first time homebuyer. Alternatively, an investor may see such a home as a great opportunity.

Most fixer uppers are priced with the cost of some repairs in mind, but the listing price is only one part of a fixer upper's price. The rest of it is what you'll end up paying after adding in the repair bills. The repairs may lean more on the aesthetic side (paint, carpeting, countertops) or more significant and expensive upgrades (roof replacement, issues with the heating, electrical, or plumbing systems).

Fixer uppers are best for buyers and investors willing to put extra time and money into the property. Ask yourself these questions: Is this purely an investment, or are you planning on living in the home? Do you need to move in soon? Are you exceptionally handy around the home? Do you have a background in a trade (i.e. roofing, HVAC, carpentry) that may aid you in fixing the issues outlined in the inspection report? It may be possible to get financing that not only pays for the cost of the home, but also includes money for renovations. Ask your agent and mortgage lender about those options. If not, calculate the costs of hiring outside help. Can you comfortably afford that, on top of the price of the home?

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