Have you ever gone looking for a home to buy in an up and coming market neighborhood and noticed a home hideous enough to rival the infamous Neibolt House from Stephen King’s classic, It? You blink in disbelief, half expecting Pennywise to lunge from an untrimmed hedge at any moment. Who would want to buy that fixer upper, you may wonder? Well, you’d be surprised!
Other homes may appear gorgeous, with their fancy manicured lawns, symmetrically placed light fixtures and intact windows. But what if you took a peek inside and saw potential in this ugly duckling? What if an architectural gem was hiding beneath the chipped paint, cracked floorboards, and giant portrait of Barry Manilow on the bathroom wall? The truth is that buying a fixer upper can help you save big time … if you know what to look for. Take a look below to find out how you’ll be laughing all the way to the bank when you turn your dowdy step-sister into the Cinderella of the street.
Don’t Judge the Cover, Judge the Content
All that glitters is definitely not gold. This is especially true with staged homes, which according to the Real Estate Staging Association sells 72 percent faster than non-staged ones. Staging is basically an on-the-surface alternative to renovating where hired stagers create real live-in scenarios with exquisite furniture, artwork, and accessories. In essence, it’s a form of embellishment. But while it’s true that staging plays a fundamental role in marketing a property, not everyone is good at it. A home you might drool over with proper staging may look like an eyesore with zero or little staging.
In fact, one of the great perils of home buying is to judge a book by its cover. What if the seller chose not to hire a stager, or what if the stager was all willy-nilly and cattywampus in presenting the home in the best possible light? Just because the home wasn’t presented with all the bells and whistles, doesn’t mean it cannot be amazing with all that sweet modern furniture you just bought with the money you saved selling with Homie. It’s therefore vital to peek beneath the surface and envision what the fixer upper would look like with a bit of elbow grease and improvements.
Alternatively, if a home is impeccably staged, it does not automatically mean that you’ve discovered a great buy either. You may still need to investigate for potential red flags. Now, we’re not saying you should invest in a giant magnifying glass and deerstalker cap (although that is a mighty allurin’ look) but you do need to scratch the surface luster to see what lies beneath. Here’s a list of some vital areas to focus on before you allow yourself to be seduced by those gleaming door knobs and that “chef-grade” percolator.
Checking the Plumbing, Foundation, and Electrical Outlets
For plumbing, be sure to check the main sewer line. You wouldn’t want to experience clogging in that region if lines need repairing or replacing. Sewer clogs are a bad deal. Maybe write that down.
If you discover a damaged line and still want the ugly house, make provisions in your budget for plumbing repairs or use that as a negotiating point. You should also check for toilet leaks and the condition of the water heater tank. Remember, a geyser lasts about a decade, so take that into account when budgeting for potential replacements.
Have an electrician or property inspector check the wiring and signs of overloaded circuits. Also check the electrical outlets for any physical defects. You could check the foundation by looking for poor drainage, mold, and moisture. Be on the lookout for fissures and cracks in the foundation.
Are there vertical cracks along the walls or does the stairway have zigzag slits? Horizontal cracks on a foundation wall are a definite red flag, as well as chipping or crumbling concrete. The best way to decipher any foundation damage is to hire a professional. Don’t know where to find one? No worries, as you can hire one of our super-efficient inspectors by clicking on our service provider marketplace. Our trained inspectors will also inspect your plumbing and electrical outlets. All providers charge a service fee but it’s well worth the investment.
Checking Location, Noise Levels, Traffic, and Schools
Location is definitely a deal breaker here. If your ugly house is in an upscale neighborhood[JG2] , you may have hit the jackpot, as this would increase your updated home’s value. Be careful of ‘big home envy’ though. Remember that if you buy small in an upmarket neighborhood, your Phoenix real estate fixer upper could score you more pennies when you sell.
It’s also great if the direction of your home lets you experience the full effect of the sun, as this would keep your home warmer during winter. Also check for noise levels and whether traffic volumes are tolerable. It’s always a good idea to check the crime statistics from Statista. You could also check if the area has good schools and whether you’ll be central to major arterial roads.
Buying Ugly Could Work to Your Financial Advantage
Bear in mind that because the house is freaking ugly, the owner wants to flush the whole thing out, like yesterday. They may even be over zealous in sealing the deal. Heck, even the neighbors may treat you like a celebrity, especially when the ugly duckling becomes a swan. You may even get a fancy gift basket (remember to share).
Sellers may price these homes lower than the market average and fast track negotiations so they can secure a contract sooner rather than later. They’re also more willing to accept a re-negotiated offer. Also, other buyers may turn up their noses with one glance at the fixer upper, removing all competition, and placing the seller at the sole mercy of your offer. And if your offer is good, you may include accepting credits. This will lower your closing costs. And remember, if you buy via Homie, you’ll get a refund of up to a $5000 as part of the Buyers Agent Commission. You can use this toward your closing costs.
Did you know that most banks are stingy when it comes to financing a decrepit house? Your seller knows this, and may extend some leniency by applying for the finance themselves, and charging you interest. Eradicate the stress of not knowing whether you can afford the house, by using Homie Loans, our sister home-financing company. We’ll get you pre-qualified and pre-approved in record time, so you can negotiate with a gleam in your eye.
Make the buying process as smooth as a private jet ride when you select Homie as your agent. Our agents will help you understand all the fine detail of your buyer’s agreement contract, collaborate with your seller, relay vital information to you, and assist with any renegotiation.
Okay, So Your Diamond in the Rough May Need Some Polishing
Remember that your work does not end once you’ve signed on the dotted line. You have yet to transform your home from a diamond in the rough to a perfectly cut and gleaming rock that Liberace would have been proud to wear. If you’ve conducted a home inspection with us, you’ll be given a detailed report of the necessary repair work. Prior to settling, it’s a solid idea to include all these costs into your budget and use this as a negotiation tool to get the seller to lower the sale price. Repair work should include anything from paint work to repairs.
One advantage of buying an older house is that existing landscaping like plants and trees could bolster your curbside appeal and home value. You could even add to the aesthetic by creating new features like a fountain or some pathways. Painting, additional landscaping, and customized remodeling also gives you the chance to make the home your own. Unkempt historic homes may also have hidden architectural gems like high-profile moldings, stained glass windows, or meandering stairwells. Imagine unraveling all of that underneath tons of dust and grime? Sweet, right?
Convert Your Ugly Into a Lovely
Not all sellers are great at staging an ugly home. The seller may even feel that the ugly duckling isn’t worth the effort. This leaves a nifty little gap for an astute buyer to see that diamond in the rough.
Keep an eye out for foundation, plumbing, and electrical issues. You could use a repair budget as a negotiation tool when making your offer. Negotiations should also be pretty easy here, since the home has probably turned off all your competition. And if you use Homie agents, negotiation will be even more streamlined. Just draft your offer via our digital platform and a Homie agent will call you to review your offer. We’ll then submit your offer to a listing agent and oversee all your paperwork, from negotiation through to final sale. We make it easy!
Sign up with Homie today and use your Buyer Agent Commission (BAC) refund toward your closing costs, so you’ll have more to spend on transforming your fixer upper into a sparkling diamond.