5 Tips for Taking on a Fixer Upper
When it comes to buying a home, my husband and I have never been afraid of taking on a fixer upper! In fact, the thought of us looking at anything but a fixer up seems quite foreign to us! Buying a home comes with many highs and lows and we experienced them all!
The BIG Mistakes
Our first home that we bought was a HUGE learning lesson! We took the homeowner’s word on the work that had been done on the property and chose not to get a home inspection done (BIG MISTAKE #1) We also chose to forgo a real estate agent and do a private sale (BIG MISTAKE #2) If we had gone with a real estate agent on this deal, we may have avoided the first mistake of not getting a home inspection! With this home we also decided to get a mortgage on our own (BIG MISTAKE #3) This process was exhausting, time consuming and to be honest, when all was said and done, we never felt we had the best rate/terms and conditions we could have! But we were TIRED at that point and just wanted to get into our new home! We thought we could do it all ourselves and was that ever a BIG MISTAKE!
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Taking on a Fixer Upper
When we decided to purchase our second home, we did things A LOT differently! We will never, EVER purchase any home without a proper inspection again! Even though some of the issues we had in the first home probably couldn’t have been found by an inspection anyways (i.e., a live wire hanging in the wall, an extension cord being used inside another wall to give power to the ceiling fan and newspaper as the only insulation in the exterior walls) there were a lot of things that would have been caught!
We will also always go through a real estate agent going forward! It would have saved so much of the stress that came with the independent sale and provide the assurance that the sale would be final when a contract was signed. (We had someone break the contract on the sale of our home and we almost missed out on buying our dream home because of it!) An agent also ensures that you aren’t overpaying for the property and elevates the stress of contracts and the handover!
Finally, for us, working with a mortgage broker during the buying process was a game changer! One of the homes we purchased had multiple back up bids come to the table as we put in our offer! It was cute as a button but because of that, it was a hot commodity! Our broker found us an amazing rate so much faster than if we had tried to find one on our own which in the end, could have caused us to lose the house! The right broker will not only help you find the best rate but also make sure the terms and conditions are the right fit for you too! The process was so smooth, and we felt confident that we had the best mortgage terms and rate that we could have at the time!
Who to Work With
Sometimes it is hard to know who to work with or who to trust, so look at this as if I am a good friend who is giving you my personal recommendation of who to work with! Pineapple Mortgage is a Canadian mortgage company that has over 450 brokers and agents working hard for their clients! They are committed to getting you the best rate available for your situation. Their online application process is 100% digital and secure allowing you to get pre-approved for a mortgage in minutes without even having to leave your home! With a turnaround time like this, you can go into the buying process with confidence, security and less stress!
Ok now that we have covered the basics of buying any home, not just a fixer upper, let’s get into the nitty gritty of that F word…. FIXER UPPER
Check out my 5 tips for taking on a Fixer Upper bathroom here!
Do the Math
Like I mentioned above, it is SO important to know your budget and understand what your payments will be prior to even looking for a home! There is no point in spending time looking if you can’t afford or be approved for the house in the first place. Set a budget and a timeline BUT be sure to give yourself some wiggle room! Both rarely go as planned! It is also important to have a basic understanding of how much your renovations are going to cost when you are purchasing a fixer upper. There will be a huge difference in budget if a home needs structural repairs versus a home that is needing simple cosmetic updating. Knowing these costs will also give you leverage in the purchase as you can ask for a reduction in the price depending on what needs to be done! This is where my recommendation of using Pineapple comes into play! Working with your mortgage broker from the beginning will mean you have all the numbers you need prior to starting the process!
Determine the Right Location & Project
You don’t want to over improve! If you are going to invest your hard-earned money and time into a home, make sure it is one that you will see the value hold. You don’t want to price yourself out of the market if you ever do need to sell because you simply won’t ever get your money back if the market takes a downturn!
DIY as Much as Possible
Whenever renovations are required, it’s usually going to be more cost effective if you can DO IT YOURSELF! Even if it is something as simple and easy as demo, painting, insulating or patching walls it will save you a TON of money! If you aren’t the hands-on type, be prepared for the extra stress and time that comes with having to source and coordinate contractors and manage the work site. Not to mention the additional costs that can occur if there is a miscommunication or unforeseen issue that causes things to go over budget and time!
Hire the Professionals if Necessary
As much as I encourage you to try those intimidating DIY’s, some things should just be left to the professionals! Electrical work, gas fitting, foundation upgrade and structural issues or anything else that seems to be way over your head may make sense to hire out! If you have budgeted well, you should be just fine to take on these costs. You can also visit my friends at Pineapple Mortgage for great renovation financing options, like the Purchase Plus Improvements mortgage!
Enjoy the Process
Rome wasn’t built in a day, was it?! This is something I sometimes struggled with because I want to have it all tied up in a neat little bow…. yesterday! As time went on though, I truly started taking my time with projects and enjoying the process more! It will all be done soon enough, so give yourself some grace and just enjoy the process!
Well there you have it, I hope you enjoyed these tips on buying, getting a mortgage and taking on a fixer upper! I also hope you learn from my mistakes my friends and set yourself up for success! I would love to hear your thoughts! Is there anything I missed, have you had any disaster fixer upper experiences? Let me know in the comments below!