Category — Home Repair

It’s normal for many homes to require some repairs when you buy. It may be that the home wasn’t maintained properly, or it may just be that the normal ravages of age require a few repairs. Whatever the reason for the repairs, it’s vital that you very carefully evaluate the necessary repairs when you buy. Getting an estimate for repair costs is the first step to determining how much the repairs will cost, but keep in mind that the costs may not stop there. Whether you negotiate an escrow allowance or a price discount for repairs, make sure you allow yourself ample room to cover the costs.  

Repairs and renovations can add substantial value to any home that you purchase. Adding another bedroom, expanding the bathroom, building on an enclosed porch or remodeling the kitchen can add thousands or tens of thousands of dollars to your home’s value. However, when you’re planning to make repairs or do remodeling, it’s important to get an accurate idea of the costs. That bargain home that you think you can buy cheap and double the value by making a few renovations could actually cost you more than an expensive home that doesn’t require any work.

So your new dream home is perfect – except for one little thing. During the walkthrough, it comes out that your older electrical system isn’t compliant with current building codes, or perhaps a built-on den sits too close to the property line. The homeowners and real estate agent may rush to assure you that “it’s been this way forever” and nobody cares. In reality, though, nonconforming and illegal property uses can become costly problems, and you must evaluate the risk when you buy.

Think that comparable sales tell you everything you need to know about the current real estate market? Think again. Economic factors aside, real estate markets tend to operate in boom-bust cycles. If you buy at the end of the boom, you’ll be faced with a long period of softening real estate market and potentially falling home prices. The key to making a good investment in real estate is to predict where market values are heading – not just where they currently stand. To do that, take a look at how much it costs to build your home.  

Many buyers want to get the perfect deal. Maybe you’re determined to do all of your research up front so you know exactly how much to budget for repairs, home improvements and resolving any issues in your new home. That’s a reasonable desire, but don’t let the fine print ruin your deal.  

With the presence of all of the home improvement and flipping shows on television, it’s easy to succumb to the allure of buying a fixer-upper, making some changes to the home and then realizing an amazing profit or finding yourself living in your dream home. Unfortunately, renovations turn out to be a disaster at least as often as they’re successful, if not more; so when is buying a fixer-upper a good idea?  

Buying a home is a big expense, but the expense doesn’t stop at the down payment and purchase costs. If you’re in the process of buying a home and calculating your mortgage payments and budget, make sure you budget for maintenance and repairs.