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Buying To Renovate: What You Need To Know

If you’re looking for a house that’s not exactly turnkey, you’re not alone. Call it the HGTV effect. Is anyone else OBSESSED with House Hunters Renovation?!

“So you’re thinking of buying a fixer-upper? Maybe you’re a do-it-yourselfer, or you just love this home so much that you don’t mind lavishing extra TLC on it in the years to come,” said U.S. News. “Or perhaps you’re enthralled with home renovation television programs where every home has a camera-ready happy ending.”

Yes, buying a house in need of renovation definitely has its advantages, starting with the ability to make updates that match your style and (hopefully) increase the value of the home. But it also comes with its fair share of challenges. Here’s what you’ll want to know before you make that offer.

Not every home in need of renovation is a diamond in the rough

Some homes might just be too far gone to bring back to life. Or at least too expensive to be a good deal. There is a reason “movie plot lines have been based on the darker idea that rehabilitating a home can result in disaster,” said U.S. News. “Sometimes fixer-uppers turn out to be dismal downers.”

It could be that the house hasn’t been maintained properly and has serious issues that are going to increase the timeline and drive up the renovation costs. Maybe it needs work that’s well beyond your scope – and budget.


“If the house needs significant structural improvements, many real estate experts recommend avoiding it altogether,” said This Old House. “That’s because major repairs – plumbing and electrical system overhauls, foundation upgrades, and extensive roof and wall work – are usually ‘invisible’ and hardly ever raise the value of the house enough to offset the cost of the renovation.”

Inspection, inspection, inspection

Some homes in need of renovation are purchased as foreclosures or at auction, but the problem therein is that you might have to buy “as is.” That means you don’t get to inspect the home before purchase or request any repairs from the seller when you uncover problems.

It goes without saying that this is an idea that is often frowned upon—especially for those who are inexperienced in home renovation. Buy a home “as is” and you may end up with a great big money pit. Making sure your home is inspected before you purchase can help you see the full picture and decide whether it’s a good buy—or a goodbye.

Think about bringing in an architect and an engineer, too

If you’re planning on knocking down walls (and aren’t we all!), you might want to consider hiring an engineer and/or an architect early on. Structural walls or surprises inside the walls like plumbing or HVAC may make the open floorplan you’re dreaming of unachievable – or at least really expensive. It pays to do your due diligence before you purchase, even if it costs a little more upfront.

Who’s doing the renovating?

Planning on taking on some or all of the renovation yourself? Are you a first-timer, an old pro, or somewhere in between? If the grand total of your experience is patching a few nail holes in your college dorm room, you might want to think about hiring a professional.

Some things, like tiling or installing hardwoods, and some types of demolition, can be taught in a clinic at your local home improvement store, or even on a video on YouTube. Other skills like roofing, plumbing, and electrical work are usually best left to the pros. Keep in mind that, depending on what you plan to do to the house, you may also need permits before any work can begin.

There’s a loan for that

Financing is an important factor when buying any home. A traditional mortgage won’t pay for your repairs and updates, and most people aren’t super excited about shelling out a bunch of cash for renovations on top of their down payment and closing costs.

“If you’re buying a home that needs a little TLC, a typical fixed-rate mortgage isn’t going to help you pay for repairs,” said Interest.com. “Your lender isn’t going to approve a $300,000 loan to buy a home that’s only worth $250,000. And, while homeowners sometimes use home equity loans to remodel, you can’t get a home equity loan when you have no equity. This can be a big obstacle for buyers who don’t have extra cash to make needed renovations or repairs before moving in.”

Thankfully, there is another alternative. Several loans build cash for renovations right into the terms. “Four government-backed loan programs are designed for purchase-remodelers,” said Bankrate:

  • FHA 203(k)
  • Streamlined FHA 203(k)
  • Fannie Mae HomeStyle Renovation mortgage
  • Fannie Mae HomePath mortgage

“Each program bases the loan amount on the value of the home after renovations are complete,” they said. You’ll want to talk to a lender and get preapproved prior to finding a home to streamline the purchase process.

Position Realty
Office: 480-213-5251


When it comes to buying a home, we always think about the big things: sales price, location, mortgage qualification. But it’s often the little things that rise up to make living in that home a great joy or a huge letdown.

Your welcome to the neighborhood

There are neighbors who bring warm cookies to welcome you to the neighborhood and then there are the Homeowners’ Associations that welcome you with a stern warning to move your storage unit immediately even though it’s only been in your driveway for a few hours and you haven’t even arrived from your cross-country drive (true story).

The friendliness of your neighbors

Beyond your initial impression, is living in your neighborhood going to give you the kind of lifestyle you want? In many cases, you won’t know until after you’ve moved in. Spending some time there and getting to know your potential neighbors/asking questions before you purchase may give you the info you need.

Where to put the dog bowl

Does it seem like a frivolous thing to be considering when buying a home? Only until you move in and realize there’s nowhere to put the food and water bowls that won’t end up spilled, kicked over, or constantly in the way.

Make or Break

Think about it in terms of a car purchase. You might not notice the number/placement of drink holders in the new car you’re buying, but you’re sure going to notice how lacking they are when you’re driving a carful of people around in the 100-degree summer and there’s nowhere to put your Big Gulps. When your pets are a part of your life, considering where they will graze (and sleep and run) may help you make the best decision.

Closet space

Closet space isn’t necessarily a small thing (for many of us, it’s an absolute necessity!). But, it can also be one of those things that is easily overlooked when seduced by a big kitchen or a pool in the yard. If the closet space seems like it may be a problem when you tour the house, it most likely will be a problem when you’re living in the house.

Placement of the laundry

Is it a deal breaker if your laundry room is downstairs and the bedrooms are upstairs? Probably not, but it does make things more challenging. If you’re trying to decide between a couple of homes, this may be one of the little things that helps you finalize your decision.

Commute time to and from work

Your daily commute is something you’ve probably spent considerable time thinking about, especially if you’re considering moving farther from work. But even if you’re moving equidistance from your existing home, the commute could be very different. And it’s not something you want to discover AFTER you’ve moved. Doing a few test runs before you make an offer can help.


The schools aren’t great

If you don’t yet have kids, or they’re babies, or already grown, or you don’t plan on kids, the quality of the schools may not seem like a big deal in relation to other items on your must-have list. But, you never know how long you might live there. A “starter” home that’s supposed to be a springboard to a large home in a few years may not end up springing you so quickly. And studies show that good schools can help home values, so even if you’re not packing lunches and preparing backpacks, being near people who are might be a good move.

Positioning of the house

Everyone wants a house that’s light and bright, but what you might not want is a sun that sets right in your living room. If you’re in a warm climate, you can plan on being hotter than you’d like to be in that room during the summer and having higher electric bills.

Really high ceilings

This is another feature people tend to want in their home… until they actually have them and realize:


  • It’s cold in the winter since all the warm air gets sucked up.
  • It’s hot in the summer since conditioned air has a hard time doing its thing in such a vast space.
  • You’ll never be able to paint the room without renting scaffolding
  • Ditto for changing light bulbs
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