From OL Refund to Re-done: 5 Things To Ask Yourself Before Buying A Fixer Upper

For many who’ve caught the homebuying bug, the reality is that a fixer upper might be your only way into today’s hot market.

With housing prices on the rise, buying a home already seems pretty insane -- especially in cities like Los Angeles, where the average home goes for $515,000.

When I bought my home with Open Listings in September 2016, I knew that I’d need not only OL’s 50% commission refund to help cover those hefty closing costs, but also a place that others weren’t going to get in a bidding war over -- which is why I opted for a fixer upper.

FixerUpperExterior

Benefits of a fixer upper

Fixers tend to be lower priced, sit on the market longer, and get less competitive offers. They require more creativity and elbow grease to see their potential.

But, this means you could be getting a steal compared to your neighbors who just couldn’t live without that penny tile in the bathroom.

P.S. No need for FOMO. Penny tile is easy to install.

While you’ve probably had your fair share of binging Chip and Joanna Gaines on HGTV (do the words “open concept” and “shiplap” ring a bell?), scrolling through endless renos on Remodelista, and Insta-stalking your favorite home decor bloggers, turning a fixer upper from shitty to pretty can be super exciting and rewarding, but it’s no small task.

After 6 months into remodeling my fixer upper, here’s the 5 questions I wish I asked myself before diving in head first with my hard hat:

1. Is it worth the fix?

Ugly is easy to repair, but structural issues are a beast. Many people might pass on a home because it looks outdated, but their ‘nope’ is your moment to carpe that diem.

Little touches like new paint, cabinet hardware, or ripping out nasty carpet in exchange for hardwood floors can go a long way. These cosmetic fixes are easier to DIY and budget for and will add instant value.

On the flip side, be wary about homes with major issues like foundation problems.

Our Open Listings buying agent was able to negotiate a hefty credit to help us fix the issues we found during the inspection process. But, unless you can negotiate repairs or seller credits, this could cost you tens of thousands to repair on something you can’t even see or enjoy. It’s not worth your stress or your hard earned money.

2. Will you be able to maintain your lifestyle?

Owning a home isn’t fun if you become a slave to it. Margot Stephenson, founder of Someone Social, recently bought a fixer upper condo after spending seven months hunting for a cute cottage.

“When I sat down and really made a budget, I looked at how it would affect my lifestyle and realized I’d have to stop everything and just hole up in my place.”

Eventually, Margot opted to look at homes under her price range so she wouldn’t have to make sacrifices in her day-to-day life.

A fixer could satisfy your home goals while preventing you from stretching yourself too thin. You’ll need more cash up front to help cover initial repairs you want to make, but a smaller loan means lower monthly mortgage payments so you can still have your grain bowl, and eat it, too.

Remodeling your kitchen details

3. Is this your forever home or for-a-few-years home?

Is the location, the one thing you can’t change, somewhere you could see yourself in for a long time? Maura Cottle, a Partner and Creative Director at Heatwaves Collective, knew that a fixer upper was the right choice because the location was a must.

In order to get into their dream neighborhood, Maura and her husband Ken are taking on their remodel in small projects. “I have really big plans for this home, but I’ve made it what I need it to be until I get there. I love the neighborhood, so I’m really happy.”

But, if you know this isn’t a long term sitch, consider your future buyers. While you should always do you and put your needs first, don’t go crazy with the statement chandelier or the custom built-ins. Save that for when you find your dream casa, and opt for stylish yet budget-friendly upgrades that you know will add to your home value.

4. Can you & your wallet roll with the punches?

Facts: remodeling your home will test your patience, make you question your sanity, and cause occasional fits of rage-slash-tears-slash-joy. As you uncover additional issues -- oh, hey weird old wiring that needs to be replaced and rotting floor boards -- it will inevitably take longer and cost more than you expect.

Apparently, time is a flat circle, especially when it comes to home renovations. If you have mad DIY skills, there’s lots of things you can tackle on your own, but know that even if you’re working with a contractor, weekend projects can quickly turn into month-long projects. You’re gonna need to take some deep breaths. Okay, a lot of deep breaths.

Remodeling a home plan

5. Do you have a vision?

If you’ve got an inner Kelly Wearstler just waiting to be unleashed, a fixer could be the perfect blank slate for you and give you the ultimate creative control and freedom to create your perfect place.

“If we had spent more money on a move-in ready house, I would’ve slowly updated it anyways,” says Maura. “Now I don’t feel bad about tearing our bathroom apart.”

If getting lost in the details of exposed beams, vaulted ceilings, grout colors, and marble slab veining sounds like heaven to you, then a fixer upper would have more pros than cons. You’d be able to get type-A with it and pick every detail to your liking to build your ultimate dream pad.

Still gung ho about tackling a fixer upper? Check out Open Listings’ pet project, Shitty Listings. It scours the market for fixers, teardowns, distressed properties & hidden gems just waiting for your special touch.

Versions of this post have appeared on the Forbes Real Estate Council and Create & Cultivate blogs.

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