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Raising A Millionaire: Quote of the Week

"Life is tough, and if you have the ability to laugh at it you have the ability to enjoy it."

  -Salma Hayek

Raising A Millionaire: Article of the Week
The Fixer-Upper: How much work is too much?
The term "fixer upper" may often strike fear in the hearts of home buyers. There are no strict measures in defining exactly what a fixer upper is. It could mean a historical house in need of minor repairs or it could mean a run down house with sagging floors, a leaky roof and a serious foundation problem. Still, fixer uppers represent a great way for some home buyers to move up into larger homes at a fraction of the cost, provided their willingness to accept the effort and costs needed to make the necessary repairs and improvements the home needs.

Don't let the term "fixer upper" discourage you from considering them in your search of buying a home. By all means, consider these homes during your house hunting escapade, but you should take your time and carefully look into all of the repairs needed in order to make the house a home. More important, you will need to figure out how much it will cost you. A seemingly great bargain can turn into the money pit if you don't do your homework.

In your quest for a fixer upper, you can check out various real estate web sites on the internet and in your local newspaper. Even if you're new to house hunting, you will shortly learn frequent discrepancies in between a house that seems too good to be true and reality. Even if you pull up to a house that seems to live up to the promises that were advertised, have your real estate agent take you inside the house for a walk through so you can get a better look. Many fixer upper houses can look extremely appealing on the outside, when the inside can be a completely different story. You will learn soon enough how to recognize fixer upper houses that are worth further investigation and the houses that are not.

Even if you decide that a house in need of a substantial number of repairs, don't let the prospect of a great buy tempt you into ignoring the house's problems. Many fixer uppers can appear intoxicating, when buyers are looking for the greatest deal of all times. Sometimes the seller of the fixer upper may try to make the problems seem less complicated or try to convince you that the repairs will be an easy fix to make a quick sale. They may also try to discourage you from having an appraisal on the house, where the appraisers may be able to find more problems in the house and therefore reduce the value of the house even more.

Never let a seller pressure you into buying a fixer upper or offer you a special once in a life time deal if you agree to buy the house right then and there. Never make a same day decision when buying a house. Buying a house is an important financial commitment that should not be taken lightly and should be carefully considered. Buyers need to allow themselves enough time to consider how much work, time and money it will cost them before committing to a house. You'll be surprised how much different that great buy will seem after a day or so of consideration and after looking at other potential houses.

Buyers should also find out how the asking price compares with the prices of other houses in the area. Are there any other fixer upper houses in the neighborhood? Have any other nearby houses been renovated and sold? What do you expect to get for the house if you renovate it and decide to sell it? There is nothing more aggravating to a home owner than renovating a home with the intent to make a profit, only to discover the real estate market had turned bad. If home values are depreciating, the home you purchase may be worth less than you originally paid for it even after all the hard work of making the home improvements and repairs.

Once you find your dream fixer upper and have already been pre-approved for a mortgage, you must now find yourself an experienced house inspector to perform a thorough inspection before you commit to the purchase. Sometimes house inspectors can turn up significant problems' that the interested buyer was not aware of.

By Elizabeth Harper (Lbry.com contributor)

Raising A Millionaire: Other Articles

Why Real Estate? - There are so many reasons to own real estate. Here's help to get you going on the road to financial well-being.

Stacking the Odds for Real Estate Success - Why not take advantage of all that real estate has to offer you? Learn how to "stack" the odds of real estate success in your favor.

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