Home buyers sometimes find that their wants in housing exceed the limits of their qualified resources.  Their preferred type of home in their neighborhood of choice is priced too high for them.  Some folks in this situation decide that maybe they should find something that needs work in order to reduce their costs.

Rationalizing a major project disguised as the perfect home for you could be a huge mistake.  We hear some common things said by first time home buyers that are potential disasters.  Everyone knows somebody or has a relative who is good at  ...(fill in the space with plumbing, HVAC, electric, excavation, etc.).  Somehow, those friends, acquaintances, relatives become free labor in the minds of home buyers.  Almost always those sources of help do not materialize.  They either want to charge retail, they really don't know how to do what you thought they knew, or they simply don't have enough free time to help you. 

It's possible to get a construction loan or an FHA 203K loan that will finance the cost of the repairs and upgrades, but you have to be able to qualify for the higher amount.  If you're looking at homes in need of some work already priced at your maximum budget, it's not going to happen. 

The worst possible scenario is buyers who find a house that needs work, buy it with the limits of their resources, and then use their 24% builders store credit card to purchase the needed materials.  It's pretty easy to run up a huge bill for materials that could take years of financial stress to pay off. 

When you're shopping for a new home and find that the prices don't quite match your budget, you're either not ready to make that lifestyle upgrade, or more likely, you're shooting just a bit over your target.  It would probably be wise to go over your choices and find a way to get closer to your economic comfort range. 

E.J. "Mike" Carlier  Lakeville, MN

Keller Williams Preferred Realty 

612-916-3033

http://www.prettygoodhomes.com

 

2 Comments on Shoiuld I buy a fixer upper?

MAY
15
2012
1,404,779 Points 54 Featured Posts Outside Blog Called Shot Master

If the byer knows what they are doing and buying it to live in, it can be a good thing, but, in my area flipping is nearly gone.
3:59pm • #1
MAY
16
2012
385,172 Points 8 Featured Posts Called Shot Master

Bill, it's always a good thing to save money, but buying a not-ready-for-good-living home may not be the best way to stretch ones financial limits.  If a buyer's budget is adequate, repairable homes are certainly a good option.
6:00am • #2


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