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Is a Fixer Upper worth it? Can this be turned into your dream home?

January 16, 2017 by Derrick Timmons

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Why does the average home buyer consider buying a Fixer Upper?  They look at these homes typically because they are less expensive and they offer a great opportunity for a home buyer.  These homes can certainly be a great option for many buyers and investors.  If it were as easy as it looks on HGTV, however, why doesn’t everyone do it?  The market value of the home and how much repairs will cost are critical factors when considering this type of home purchase.

Is this really possible?

kitchen

When buying any home, buyers need to keep their emotions in check to be sure that they are happy with their decision once the initial excitement has worn off.   Keeping this careful mindset is especially important for a Fixer Upper.  Here are the important things for Fixer buyers to consider:

Initial home price

Often banks or trusts may own the fixer home and they know exactly what they want to get for the home.  They list the home lower than the comps in the area, but still high enough to make a profit. Therefore, if all the needed repairs are factored into the math you do, you should consult your Realtor and see if the repairs that are needed will cause the home to go above the market value.  In that case, the buyer has just purchased a home that will be cost more than the other homes on the market causing a deficit.

Cost of repairs

This information is critical for the would-be buyer.  As mentioned above, if the cost of repairs are so high that it would cause the value of the home to go above market value then the buyer has purchased a home with negative equity.  Your Realtor and/or Contractor friends can help you make a “ball park” evaluation on how much the home repairs would cost.  Using this information you then can actually make a clear decision if the home is for you or not.

Do-it-Yourself

If you are willing to get your hands dirty then you can save A LOT of money and do the repairs yourself.  In addition, if you really love a home and are willing to do the work but the seller will not budge on the price, then you can be happy because the amount of money you spent doesn’t go over the home’s market value.

For the Math/Visual people

A good deal will look like

Listing Price of Fixer  +  Cost of Repairs =  At or below Market Value of the home

A bad deal will look like

Listing Price of Fixer  +  Cost of Repairs = Above Market Value of the home

Conclusions

If you are thinking about buying or investing in a Fixer Upper it is a great idea to talk with the professionals.  Specifically, a Realtor can help you know what the Market Value of the home is. If you would like more information about Fixer Uppers in your area, please contact me to discuss your situation and see if that home is the right one for you or not.

 

For Further information this article is a great one about Fixer Uppers: https://www.thisoldhouse.com/ideas/should-you-buy-fixer-upper

Filed Under: Home Buyers

Derrick Timmons

realtortimmons@gmail.com
805-807-3987
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Our Mission Statement

“Personal Service, Professional Results”

Personal Service

In Real Estate there are deals and there are people behind the deals.  We focus on creating a smooth Real Estate experience for you by doing our best to understand what you need from us to make buying or selling a home successful.  We do our best by asking questions and listening to you carefully then genuinely serving your needs. 

Professional Results

We also, however, strive to get you the results you want by being tough in negotiating the best deal for you and being organized and communicative during this complex transaction to make sure every part of the process is taken care of properly.  To help you accomplish your goals, Derrick applies his successful competitive experiences in sports and education to exceed performance expectations and get you the results you want.

What others have said

When we needed to find a realtor to help us find a property in Camarillo as part of a 1031 exchange, we thought of Derrick.

Our transaction was a little more challenging than most in that we were selling two properties out of state that were also involved in the exchange and finding a replacement property and closing was key. Finding a property was time consuming in a hot market but Derrick never gave up hope that we would find a property. Once we entered into escrow, Derrick connected us with an exchange company and the transactions were closed in a smooth and timely manner.

Derrick was a pleasure to work with and we would definitely recommend him to our friends.

-Lisa

Derrick helped us find our first house and I can't even begin to say how thankful I am for using him. For a process that can be so incredibly tedious and hard, he made it such a breeze. He is honest, hardworking, and will go above and beyond. I have and will continue to recommend him to everyone that I know. In the future whether we are buying or selling we will not use anyone else. He is THE absolute best. Thank you so much so helping us buy our first house Derrick, we are forever grateful!

Kaitlin Winter

Wow! Well done!! I've been a commercial real estate agent for 16 years and I had dozens of agents who wanted to work with me. Derrick dug up the right property and then far exceeded my expectations. Bonus: We had a lot of fun in the whole process! Derrick is knowledgeable, professional, proactive AND a highly moral level headed guy. He's a gem of a find. As my buyers agent Derrick tracked every aspect of the deal for me which made the whole transaction a breeze. He answered all my questions and/or tracked down the information I wanted/needed. To top it off his referral source of trades and related resources was equally impressive. There's no question that he and I will be working together in the future. If you want a good experience (life is short, EVERY experience should be good, and fun) do yourself a favor and just give Derrick an interview and you'll immediately see what I'm talking about.

Shaun Bieniek

I just wanted to say again how amazing and easy Derrick made this process...I hope you know that you are part of the family!

Chad Sullivan

I was really impressed with Derrick's overall real estate service. Within less than two weeks of putting my house on the market, we had a great offer! Derrick was a true professional guiding me through the process of selling my home. Derrick is knowledgeable, diligent, and caring. I highly recommend Derrick to handle your real estate needs!

Maria Callan

Working with Derrick was an honest pleasure. He always went out of his way to accommodate our busy schedules when it came time to looking at houses. He had a series of questions before we started looking to insure that he set us up with the right home for our future. He is professional, knowledgeable, creative in his methods, personable, and best of all effective. I highly recommend him.

Itzie Alarcon

Derrick is AMAZING. He went above and beyond my expectations of what an agent would/should do. Derrick is the true definition of caring, compassionate and trustworthiness you will ever find. We would not trust anyone else to sell our house.

The Law Family

Derrick is as good as it gets, possibly even better! He helped us purchase our first home. He knows his stuff and did a great job helping us find a place in our budget. He understands the process and communicates with his clients which to me is the most important part of picking a professional to work with. Derrick is highly recommended!

Shawn Lakhani

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