Should You Buy a New Home or a Fixer-Upper? Use These Tips To Decide

If high home prices are threatening to derail your homebuying journey, you may be tempted to purchase a fixer-upper. While these properties may need love and attention, they can be great choices for some people. However, they can also be money pits that can quickly turn into buyer’s remorse.

Before you opt for a home that needs lots of work, use these questions to decide if a fixer-upper is the best choice for you.

How Much “Fixing Up” Is Required?

Several surface updates are a different story than needing to replace the roof, floors, and entire plumbing and electrical systems. If you’re considering a fixer-upper, hire a professional contractor to walk through it with you and estimate everything that should be replaced or upgraded. This move will help you avoid getting in over your head.

Are You Handy?

Paying for renovations can get costly, fast. However, if you know how to lay tile, install lighting and do basic plumbing, you could save lots of money on labor costs. Do-it-yourselfers (DIYers) may even consider this to be a fun and exciting challenge.

Think about how many of the renovations you could handle yourself when deciding between a fixer-upper and a move-in-ready home. Also consider if you could live in the home while you’re renovating it, or if you’ll have to reside elsewhere.

Can You Get the Property Financed?

If the home has too many needs, it may be difficult to get the home price AND the renovation costs rolled into the mortgage loan. Your loan officer can advise you on your options, whether they be a conventional mortgage, FHA loan, or other options.

Can You Handle the Renovation Process?

Some people don’t mind having their kitchen torn to pieces or their bathrooms gutted for weeks on end. For others, this type of limbo is complete torture. Realistically ask yourself if you’ll be able to handle the mess and inevitable delays involved in home renovations. If just thinking about the process stresses you out, you may need to opt for a move-in-ready property.

Does a Fixer-Upper Best Fit Your Budget?

Sometimes, a fixer-upper can be purchased at a significant discount over a move-in-ready home. When you factor the cost of upgrades into your budget, this may still be the best – and most fiscally responsible — path to homeownership.

Homebuyers must make many decisions during the homebuying process. One of them is whether to go for a move-in-ready home or take a chance (and save some cash) on a fixer-upper. The right decision for one person may not be the best decision for another. Think carefully about your personal circumstances and what you want out of your home before you decide.

If you’re embarking on the homebuying journey, contact MIG to learn about all of your mortgage loan options and to get pre-approved.