Found a home you really like but it's a bit of a fixer-upper? What are some things to consider before you make that purchase? In this episode, we look at the pros and cons of buying a house that needs some renovations. We also look why you may want to hire a home inspector and key things to look for in a fixer upper home before buying. Finally, we discuss the option of a complete tear down and rebuild.
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Hi everyone, and welcome to another edition of Homebuyer's School.
Today I'm joined by Eddy D'Ambrosio, real estate agent with Remax Elite.
And today, the question we're gonna answer is:
What are the pros and cons of buying a home that needs renovation or upgrades?
So Eddy, let's say I found a really nice home in a great location, but it needs a lot of touch ups.
What are some of the pros and cons of buying [00:00:30] a house that needs those touch ups?
Well, one of the pros might be a price point.
Oftentimes properties that need a little bit more work or require some renovation, they're typically priced a little bit lower in the marketplace than a move-in ready property.
So, I think price is a really good consideration with a property that needs a little bit of work.
But wouldn't the opposite say while it's priced lower, the amount of work that would [00:01:00] be required to bring it up to, I guess, maybe your standard or even a code standard, would be a little bit higher than what you're actually paying for.
Yeah, and it very well could be, and I think that's actually one of the factors that brings those property's value down a little bit is that unknown.
So there are just going to be fewer people that are comfortable with delving into that risk of what are renovation costs?
And so you see that a property needs a new kitchen, [00:01:30] knowing what that cost is is so important so that you can factor that into the budget.
And so for a lot of people, they're not comfortable with that.
And so when, if maybe that is what you're thinking of doing to your property, you might be able to get a better price on that home.
Value of a home inspector when buying a fixer upper house
Would something like a home inspector be something that you'd want to take a look at in terms of just going through the house and seeing what are some of the costs that you need to apply as well, right?
Yeah, definitely home inspector is a great idea, especially with these [00:02:00] older properties that require renovations because one of the risks associated with older homes needing more work is that they may need more surprise work as well.
So that's where a good property inspector comes in because they are equipped with the experience and the tools to be able to determine maybe some of the more higher cost hidden items that may need to be addressed.
In your opinion, do you have a couple of key things that you wanna take a look at in terms of [00:02:30] something that needs renovations or upgrades that would ... You know, you'd go into a new home or I mean, a resale home and figure, "
These are the things that I really need to look at. If they don't have these things then it probably isn't for me."
And so I think that that can vary a little bit just depending on the buyer. It just depends on your experiences and your abilities.
You know, if you can ... If you're a great painter and you see a property that just needs some paint, that's a great opportunity for you to [00:03:00] negotiate a lower price on the property and then complete some of that work yourself.
But I think a great starting point is the location of that property, does the location make sense? Is that a hot area or a slower area?
And then the bones, they always say the bones of the property. What's the structure like? How's that layout? Is it something that you can work with and make into your dream home?
Is there a point [00:03:30] where you say, "I really like this location, I like the neighborhood that I'm in, but I don't like this house."
So is it ...?
Would you recommend tearing some houses down after you purchase it and just rebuilding it, or is that cost just too much?
Well, you know, in some communities that is so common. We see that with the infill conversation quite a bit now.
And so if you live in one of those really popular central communities, then [00:04:00] infill definitely is a great consideration.
If you maybe live a little bit further out in a newer community, then that's typically not really gonna be an option to just tear down and build anew. And that's where renovating is very popular.
Are there any other pros and cons of buying a home that needs renovations or upgrades that you can add?
Well, you know what?
The [00:04:30] brilliance with finding a property that needs a little bit of work is that if you're up for the task, you can get a great price and make that home truly your dream home.
You have a chance to completely refinish it the way you want.
So I think that's a huge pro and why I love helping clients with these renovation buys.
Karl Yeh: Perfect. Well, thank you very much Eddy. Thank you very much everyone for joining us, and we'll catch you next time.
Let us know if you have additional mortgage questions or home buying questions that we can answer by submitting them in the comments section below.
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About Eddy D'Ambrosio:
My experience in the real estate industry started in 2010 selling homes for one of Edmonton's largest new home builders. With over 150 homes sold, I learned what it takes to sell homes in both a busy and a slow market. In all of my years selling homes I was a top producer and in 2014 I received the A.C Westman Award for both Top Sales and Customer Service Ranking which is the highest honour. The skills I learned working in the New home Industry transfer over to general real estate in a big way and make me a huge asset to have on both the selling side of a transaction and the buyers side.
My message to those looking to sell a home today is that my experience and expertise is in understanding the people I'm selling for and the people I'm selling to, understanding the product or property that I'm working with, and developing a creative and effective strategy that will get us top dollar for your home. I enjoy the unique challenge and opportunity that comes with each individual property and I don't work with a one size fits all approach so contact me when you are ready to meet and work together to put together the best strategy for you and your home.