Fixer-Uppers: Diamond in the Rough or Money Pit?
- Article
By Samantha DeBianchi
Like the first flowers popping tentatively out of the ground after a long, hard winter, buyers are entering the market, but it’s a brave new world of real estate out there. If you’re thinking of buying a “fixer-upper,” how can you tell if your prospective home purchase is a beautiful, shining diamond in the rough or a soul-sucking money pit from hell?
Strip Tease
Many of the fixer-uppers on the market are distressed properties such as foreclosures and short sales that have been “stripped” by their owners, or thieves, of everything from major appliances and fixtures such as fans and lighting to other, harder and expensive-to-replace items, like central air conditioning units and copper wiring. Often only the appliances have been stripped from homes and sold for a quick profit. If you notice the refrigerator is missing at a showing, take a closer look and see what else is gone, and calculate the costs of replacement, before making an offer.
Them Bones
How about the “bones” of the home? Does it have characteristics of a certain architectural or design movement? A breathtaking fireplace, original wood floors, etc.? Classic features never go out of style, but over time, if other owners have botched their own renovations and destroyed the charm of the house, you’ll have to live with, and could end up driving yourself crazy and spending thousands to correct. You may be better off moving on to another property that hasn’t been “ruinovated.” Also, keep an eye out for lurking structural issues, like termites, cracked foundations and other major issues that will be expensive and frustrating at best, impossible at worst, to fix. A home inspection will bring these issues to light but savvy buyers and real estate agents can help spot these issues before entering the purchase phase.
Yep - Location
I would break the cardinal rule of real estate if I didn’t mention location. It may sound clichéd, but the one thing they aren’t making any more of is land, and even if the home has major issues, it might be worth buying simply for the land-use possibilities in the future. Perhaps the property would be better as an investment property. But take into consideration everything mentioned above. If you plan to live there, even for a little while, you could get very frustrated with the drain on your mind, body, spirit and wallet that comes from buying a money pit.
Samantha (Sam) DeBianchi is a Realtor and founder of DeBianchi Real Estate. Her expert real estate advice and straightforward approach can be seen and heard on FOX Business. Always keeping it REAL, you can follow Sam online on Twitter and Facebook.
