Worth It? 3 Tips for Buying an
Imperfect House at a Perfect Price
home equity articles and tips
There is no doubt that when purchasing anything we all want a good deal. What seems like a good deal at first, however, can often turn out to not be such a great deal after all in the long run. We've all cut some corners to save some money and ended up having it cost us far more in the long run.
When it comes to buying a house, you of course want to get the most bang for your buck. One great way to save some money on a house is to buy a less than perfect house. But there is a difference between a less than perfect house and a money pit waiting to happen. Here are 3 tips for buying an imperfect house at a perfect price—that doesn't turn into a nightmare.
Know the Difference between Cosmetic Fixes and Serious Issues
There is no doubt you can save a great deal of money by buying a “fixer-upper.” What you lack in capital you can quickly make up for in sweat equity to turn a dump into a dream. It is important, however, to understand the difference between an ugly house and a broken house. Issues like peeling paint, popcorn ceilings, old plaster and even old wiring are all relatively easy fixes. Even a worn down roof isn't too difficult or expensive to fix. Bad foundations or major structural issues are not.
If the wrong things need to be fixed, you could end up spending far more than you saved, just to protect your investment. On the other hand, if you would pay less to hire a roof company than the amount saved over the life of the loan from a damage related price reduction, you can come out on top.
Buy in Winter
Spring and summer are the most popular times to buy homes and when demand is high, so are prices. The longer a home languishes on the market, the more negotiable the price becomes. In some cases, homes stay on the market because there are issues with it. In other cases it was just a matter of other homes in the neighborhood being more attractive. You can save as much as $20,000 just by buying a home in January rather than in July.
Look in Less Desirable Neighborhoods
Sometimes, you can find a crown jewel in an ugly setting just by looking in a less desirable place. In some cases, neighborhoods even get bad raps and they aren't nearly as bad as their reviews. Neighborhoods often have good and bad “pockets” or even great streets or bad streets. When looking for a home, don't rule out entire neighborhoods, but be willing to look at anything that is within your price point and search parameters, no matter the location. You might be surprised at what you might find.
Getting a great house at a great price might take some time, patience and sweat equity to turn it into one, but it can be well worth it in the end. You can not only save a great deal of money but actually turn a tidy profit by buying a less-than-perfect house and turning it into a gem.
Home Equity Tools