If you've found your dream home in the area you want, with a
big kitchen, three bedrooms and more nice features of your desire.
Is it worth buying if the home needs a little TLC - Tender Loving
Care? The answer differs depending on the type of repairs, the
neighborhood, your financials and more. Keep reading to find out
if putting an offer on a home that needs repairs is the right move
1. Are the repairs just cosmetic?
There is a huge difference between a fixer-upper and a house
that just needs some minor, mainly cosmetic, repairs. A fixer-
upper usually has a very cheap purchase price because the new
owners will have to put in so much elbow grease to get it to
livable condition. However, cosmetic repairs are another ball
game. These are small tasks like painting, changing the
carpeting, mending a few holes on the drywall or installing new
cabinetry. If the home you’re interested in only needs cosmetic
repairs, it may be worth the money. Further it offers you an
opportunity to customize the home a little bit, and the seller
might be offering a discount because the house needs a little
2. Check the inspection report
Get an inspection report before you buy. Maybe the seller told
you that all the house needs is a fresh coat of paint and a
little landscaping; but the inspection report could alert you
to bigger problems that the seller either doesn’t know about or
hasn’t disclosed. If the inspection report mentions foundation
issues or that a new HVAC system is needed, this is not the
kind of project you want to get into if you’re not prepared.
3. Will you get good ROI - return on investment after the
repairs are complete?
What kind of neighborhood is the home in? If it’s in a decent
neighborhood, close to schools and parks, or if the
neighborhood is up and coming, it might be worth buying a home
in the area because the value will increase over time. It’s
worth taking on some minor home repair projects for a house in
a desirable neighborhood.
4. Do you have the time to devote to this project?
If you weren’t previously planning on purchasing a home that
needs minor repairs, make sure you have the time and patience
to put up with the items that need updating. If you have a busy
job or kids with demanding schedules, moving into a home that
isn’t move-in ready could be stressful. Also, be prepared for
loud noises and a little debris if you hire workers or plan to
do repairs yourself.
5. Are you getting a deal on the home?
One of the most important factors is the type of deal you’re
getting on the home. If it’s not move-in ready, what’s the
incentive to do the repairs and updates yourself? If the seller
isn’t offering an allowance for you to do the repairs or isn’t
selling slightly below market to incentivize buyers, what’s the
6. Look into a 203 (k) loan
If you find a home that you’re serious about but that requires
minor or major repairs, look into financing through HUD’s 203
(k) loan. This type of financing allows you to finance the
purchase of the home and the necessary improvements without
having to seek multiple loans. Visit HUD.gov to learn more.
Certainly, a cash offer would be more competitive in a seller's
market for securing a deal, requiring repairs though it is
likely that you may compete with other investment home buyers
If you’re on the fence about making an offer on a house that
needs repairs, get in touch today and I will help you decide if
the decision to buy that home is a winning bet for you in
considering all above factors.