Buying a home that needs work can be a lot of fun for many homebuyers in the Washington, DC metro area. There may be a number of exciting benefits to buying a “fixer upper.”
Typically, a home or condominium that needs major renovation and updating may have less competition from other buyers. The property may sit on the market for months before a homebuyer writes an offer, making sellers more receptive to accepting a lower price. Stephen Carpenter-Israel, President and Broker at Buyer’s Edge, explains “Our exclusive buyers agents find that in the right circumstances homebuyers can purchase a house with good “bones” at a significant discount in a more expensive neighborhood, just because it needs work.”
See fun video at the end.
However before buying a “fixer-upper”, homebuyers should consider answering these key 6 questions. One of the jobs of a good buyer’s agent is to help their clients understand, what they would be getting into when taking on a renovation project, before they start looking at homes.
It is crucial to do as much of your homework and research upfront, if you think you are the “fixer upper” type homebuyer. During the busy, Spring real estate market, multiple bidding wars become the norm at many price points in the Washington, DC metro area, regardless of property condition. As a result, unprepared homebuyers often find themselves in an uncomfortable position where they don’t believe they have the luxury of taking the time to analyze their home renovation options. However, Steve Israel says, “buyers who have done the work upfront to get educated about their options and the current real estate market will be more confident, moving forward quickly when they need to. They know it can be the difference between winning and loosing their dream home.”
Some homebuyers love the thrill and excitement of turning a rundown property into their dream home. Other folks just don’t have it in them to take on a renovation project. One isn’t better than another. It’s just important that you try to figure out what your needs are. Please answer these 6 questions to help you decide if you’re good candidate for taking on a renovation project when buying a home.
1. Do you have the personality to go through a renovation? If you’re doing a project with a partner, do you understand what your working relationship is like? How do you both handle stress?
Whatever your personality or relationship is like now is exactly what it will be like during your project. Except you will both be on fire! Stress and dirt magnify all your best and worst qualities. You’ll also need to decide beforehand, if you are going to stay or leave during the work. Where are you going to live and how much will it cost, if you decide to leave?
2. Do you have the time and the skills to take on a renovation project?
Doing a home or condo renovation project can turn into a full time job and requires a different skill set that even the most brilliant of homebuyers may find challenging. What is going on in your life? Do you have the time to stay on top of all the details of a renovation project? Not staying on the top of the project and the contractor can create problems. Timing is everything. If jobs are not done in proper sequence, this will lead to greater expenses and weeks added on to the project.
Also, most work takes longer than anticipated. No matter how carefully you plan, there will be complications. Do you have a deadline? Permits, community and government regulations will add to the time and hassle. Specialty plumbing items, claw foot tubs, farmhouse sinks and high-end kitchen cabinets can have a very a long lead-time.
In other words, if your baby is due in 6 months, you have a Great Dane and Siamese cat and your current lease ends in 6 months, don’t start a 6-month renovation project now. You could find yourself in a tight spot.
3. In your Realtor’s opinion, what home improvements will increase your home’s resale value? Do you know what the average costs are for renovating ½ baths, full baths, kitchens, one-story additions per sq. feet or finished basements in VA, DC, MD?
Think of the big picture. A renovation should be an investment that adds value to your home. You don’t want to over build for the neighborhood. Homebuyers need to keep this in mind, not just the kitchen that they dream of expanding. Will it be a seamless renovation that adds value because it kept in character of the existing home, street and community? Your exclusive buyer’s agent will be happy to share all the relevant real estate listing sold data in order to determine what homes sell for in the area?
Also, if you plan to do a $75,000 renovation on the home you want to buy, don’t forget to ask your Realtor what would your current home search look like if you expanded it by $75,000?
4. What is your budget for a renovation? What can you afford?
Maybe this question should have been asked first, but that would have taken all the fun out of writing this blog. Once this pesky detail is calculated and you determine how you plan to pay for it or finance the work, you will need to have additional funds set aside to actually finish up the job. Small touches, eating out and change orders will add up.
5. Do you plan to do a “Harry Home Owner” renovation? Will you hire a reputable contractor to do the work? Do you plan on hiring a Design/Build Firm? Or will you hire an architect separately?
Obviously, there is only so much of the planning that can take place beforehand, but you should have some clear ideas where you plan to start. It’s also vital to recognize your skill set and identify your budget, dreams and goals.
Regardless of the route you go down, if you decide to hire a contractor, after interviewing at least three, make sure they are licensed and come highly recommended. They also must provide a detailed contract about the scope of work, timing and the price of the job, etc. You will be spending a great deal of time with the contractor and their crew. Ask yourself, “Can I trust and collaborate with this person and their team?” If your gut says, “no”, keep on looking.
6. Do you have the vision and design skills for a real life renovation?
Houzz.com and House Beautiful are wonderful websites to get amazing ideas. Unfortunately, if you’re a little bit “country” and your partner is a little bit “rock and roll”, you may have a basic design challenge.
It’s one thing to compromise on an existing kitchen or bath when buying a home together, but if you’re creating something from scratch it could become an enormous conflict between the two of you. Take some time together, now, to visualize design styles, elements, finishes, space planning and trends that inspire both of you. You will need to get on the same page and understand how design goals and inspirations will affect the budget.
Yes, I had to bring up the budget again. A top-rated exclusive buyer’s agent in DC, MD, VA will keep you on track when making thoughtful home buying decisions. Do you have the budget, vision and stamina for a “fixer-upper” or do you want to buy a home or condo that is basically “turn key?”
If you go with the former, don’t forget to talk to your new neighbors about your plans. Then make sure to advise your insurance company about any renovations, before you start, otherwise, the policy may be voided. Enjoy this joyful journey, whatever path you choose!
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