Home prices have been rising for five years, and sales this year are outpacing last year, according to the National Association of REALTORS® (a little different story here in the Bay Area. Read the analysis here). When it’s harder for buyers to find the perfect home buying a fixer upper can be a viable strategy.
There are real advantages to buying a home that needs work. Unloved or outdated homes don’t attract as many buyers, allowing you to mine the gold under the dirt. You’re getting the home at a discount compared with the rest of the neighborhood. You’re not paying top dollar for someone else’s improvements and you can make the home your own. You’ll wow your friends and family with the result.
Shop for the best neighborhood you can afford. Look for the worst home in the best neighborhood. Usually that home is older, smaller and not as well maintained as other homes. You’ll build instant equity when you improve the curb appeal, so the home looks like it belongs with its neighbors.
Ignore the cosmetics. Don’t stress over ugly paint, shag carpet or gingerbread trim. Your Berkshire Hathaway HomeServices network professional can help you distinguish features that matter and which are easy to change.
Consider the bones. You need to know whether or not you can open a kitchen to the den or add on a bathroom or other square footage. These updates can be costly but they add value to the home. Talk to your lender about loans that pay for remodeling such as FHA’s 203(k) program or Fannie’s HomeStyle Renovation Mortgage.
