CHICAGO, Feb. 22, 2016 – Most homebuyers face a basic question: How much fix-up work are they willing to do on the home they purchase? RE/MAX brokers report that for many buyers the answer is “not much,” but the brokers also contend that tackling a home in need of work isn’t only for home repair gurus.
“Homes with serious cosmetic challenges are often the best deals around if they are structurally sound,” emphasized Lee Ernst of RE/MAX Action, Lisle, Ill. “Many buyers can’t see past the cosmetic problems, so these homes often can be purchased below market value.”
One requirement for buyers seeking that kind of bargain is a fair amount of imagination, noted Tana Nordaker of RE/MAX Top Properties, Morris, Ill.
“Some buyers can look at a rundown property and visualize what’s needed to make it the home they want,” she explained. “Others can’t make that imaginative leap and are more comfortable buying something that’s move-in ready.”
Nonetheless, even buyers with the vision needed to take on a fixer upper often chose a home requiring minimal work.
“They do that for two reasons,” said Ernst. “First, it’s just a lot easier. Second, by paying for the improvements in the purchase price, they can wrap the cost into the mortgage rather than laying out cash to renovate after they buy.”
Rich Perillo, with RE/MAX of Barrington in Barrington, Ill., estimates that 75 percent of buyers he works with prefer a move-in-ready home.
“They want a home that’s 90 percent ready,” said Perillo. “They’ll deal with minor cosmetic issues, like painting rooms, changing carpeting or installing hardwood flooring, but that’s about as far as they’ll go.”
Another 15 percent of buyers, according to Perillo, will tackle bigger projects – remodeling bathrooms, knocking down walls or redoing the kitchen – because homes that need work also can be an opportunity.
“For example, it may let buyers purchase in a location they otherwise couldn’t afford,” he said.
While many who purchase homes requiring substantial fix ups either have backgrounds in the building trades or have friends or family who do and are willing to help, that isn’t a requirement, asserted Nordaker.
“The key to taking on a fixer upper isn’t having the skills to do everything yourself. It’s having people you trust to do the work and also getting an accurate idea in advance of what it will cost,” she said.
When it comes to taking on a fixer upper, Mark Zipperer of RE/MAX Edge, Chicago, believes two groups of buyers might be well served to avoid that challenge. One consists of first-time buyers who really don’t understand home improvement at all.
“In the other group are busy single professionals who may understand what’s needed but lack the time to manage the complex process. Handling a fixer upper can be easier for a couple than for a single homeowner,” he said.
Zipperer also noted a distinction between two types of fixer uppers. One requires immediate work to be livable; it may have problems involving mechanical systems, the roof or the foundation. The other type is fully functional but doesn’t offer the amenities buyers want.
“If the baths and kitchen are dated and windows need replacing, you handle the most pressing problems first and put off others for a few years,” said Zipperer, who urges buyers to consider their own time frame and budget when contemplating a renovation project.
“If it’s likely you’ll move again in a few years, a renovation might be problematic,” he said. “But if you’re staying for a decade or more, then you can enjoy the results and create a home tailored to your tastes.”