Because of what’s happened to the housing market, if you are looking to buy a house or will be soon, chances are you will see quite a few foreclosures on the market. While not always the case, most of these houses would be considered “fixer-uppers:” houses that need a lot of work and are usually sold “as-is.” Even if a house is not a foreclosure, it is often the case that if the house is in need of work, you could get a good deal on it.

I (Dawn) wanted to write about my own experience buying a fixer-upper house and the dos and don’ts I learned through the process.

My husband and I bought our house almost 2 years ago. While it wasn’t a foreclosure, it had been sitting empty for over a year, and it was a mess. The house had been built in the 1950s, and almost nothing had been upgraded since then. And while the structure of the house was solid (except for some ground water issues in a slightly leaky basement), it needed to be redone from top to bottom (windows, electrical, furnace, flooring, etc.). It was a very daunting task, but the house was a great deal, in a great neighborhood, and we knew it would be worth the time and the cost to fix it up.

Now that we have had the house for almost 2 years, we have made a lot of progress, but not as much as we thought. Like many first-time homebuyers and fixer-upper homebuyers, we overestimated the amount of work we could do and underestimated the cost.

Dos and Don’ts

 

  • Make sure you can live in an unfinished house – Chances are you aren’t going to be able to get everything you want done 100% completed before you move in. If you are the type of person who won’t be able to handle looking around everyday to see unfinished projects, buying a fixer-upper is not for you.
  • Make sure the neighborhood is worth it – Avoid buying a fixer-upper in a neighborhood where the money you put into fixing up the house and the amount you bought the house for is more than it’s worth. So, if you buy the house for $200,000 and put $30,000 of work into it, but the house will only worth $220,000 fixed up in the neighborhood, you may never get your money back when you look to sell. So only look for neighborhoods where fixing a house up will be worth it.
  • Make sure you can do some of the work yourself – While it’s possible to hire someone to come in to do all the work in your house, it would be very expensive. You should certainly hire people to come in a do any big job you have, but if you are handy, try to save some money by doing the smaller projects yourself.
  • Break all the work you want done into small projects – The smaller the better! If you have a list of small projects you can finish in a weekend, you will be much more likely to get them done. Even if those small projects are just part of something bigger, it can give you a sense of accomplishment. While you won’t get “paint every room” done this weekend, you might get “paint the kitchen” done.
  • Make sure you overestimate the cost of each project – Projects in the home almost always cost more than you plan. So, as with everything, we recommend saving for a project before starting it. Overestimating what you think the cost is going to be is the much safer route. It will eliminate delays because when something unexpected comes up, you will already have some money set aside. You won’t have to delay the project a few weeks (or months) while you save to finish it, and you definitely won’t have to turn to your credit card just so you can finish what you started. And if you still have money left over, apply it toward your next project.

 

These are the lessons I learned with my own experience in buying a fixer-upper. While I don’t regret buying the house, I do regret some of the things we did after, and I think it’s very easy to have buyer’s remorse while working on a fixer-upper. Hopefully my experience will help someone else who is thinking about going the same route!

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