CENTURY 21 Judge Fite Company HomeBlog › What You Need to Know Before Buying a Fixer Upper

What You Need to Know Before Buying a Fixer Upper

Is a fixer upper for you? Here’s what you need to know before you go all in on a fixer upper Chip and Joanna Gaines style.

A fixer upper is a tempting prospect. Such properties let you buy into a desirable neighborhood at far below typical market value. That’s because you’re not buying a typical house.

With fixer uppers, you must think carefully. Ask yourself: Will this house be worth the work I put in? To find your answer, follow these three steps.

Add Up the Costs

First, consider everything that needs to be done in the home. Always assume more work rather than less. Add up all costs for materials and labor. If you plan on doing some of the work yourself, factor in your own labor costs as well.

Hiring a home inspector helps a lot during this step. Their expertise can ensure you’re not missing any costs hidden behind the walls or under the roof.

Calculate the Final Value

Regardless of whether you plan to sell the house or live in it, you need to estimate what the finished value will be. Search for comparable listings, or “comps,” that have sold in the area to get a rough idea of what to expect. A real estate professional can easily run a search on your behalf.

Find the difference

Finally, subtract the total estimated costs from the estimated final value. Subtract an extra 5-10% for unforeseen issues. The number you get should be the absolute upper limit of what you offer. Anything more, and a great deal can easily turn into a money pit.

If that final number looks good to you, then that fixer upper may be just what you’ve been looking for. Time to secure a renovation loan!

Follow C21JFC on FacebookInstagram and LinkedIn to keep up with the latest home tips, real estate news and resources across DFW. Subscribe to our monthly newsletter, Real Estate 411 here.

Skip to content