Fixer-uppers — they’re a popular term in the real estate market. To define a fixer-upper, it’s a house (usually an old one) for sale that’s in dire need of numerous repairs. As such, it’s sold at a discounted price, which helps it attract many interested buyers.
However, since fixer-uppers are plagued with maintenance issues, they’re not as inexpensive as they appear. The repairs they need can easily double up their purchase prices. For that reason, many buyers steer clear of them. Sellers, on the other hand, don’t always have time to repair their fixer-uppers before listing them on the market.
Besides, renovating a fixer-upper isn’t an inherently smart idea. Sure, nobody wants to buy a rundown house, but sometimes, repairs do more harm than good. It can be hard to believe that as a buyer, but it makes sense from a seller’s perspective.
To make both sides reconcile their different viewpoints, let’s see fixer-uppers from their perspectives:
The Buyer’s Side
Fixer-uppers aren’t automatically a red flag to buyers. There are, in fact, some people who love old houses and purposely set their sights on them. They find the idea of restoring an old house to its former glory irresistible. But of course, not every buyer has the time and budget to renovate a fixer-upper.
Buyers considering a fixer-upper always perform a cost analysis before making a decision. This analysis computes the possible renovation costs of a fixer-upper. By assessing the house’s condition, they’ll be able to identify all the repairs it needs. They’ll estimate the overall costs of those repairs, then subtract it from the fixer-upper’s likely market value after renovation.
Once they arrive at an amount, buyers will compare it to the real estate prices in the same neighborhood. They’ll deduct at least 5% to 10% more for assumed additional costs. The amount they’ll end up with will be their offer.
If they find severe maintenance issues, such as those concerning the structural components, a buyer might avoid the house altogether. Many real estate experts advise against buying homes requiring major repairs. The value boost from major repairs hardly offset the renovation costs.
The fixer-upper that appeals to buyers the most are those that only require cosmetic repairs. Those refer to repainting jobs, new cabinet handles, and minor kitchen and bathroom renovations. If the buyers can DIY the repairs, then the fixer-upper is considered a good deal. All the buyers need is enough time to do those DIY repairs.
The Seller’s Side
Sellers who don’t renovate a fixer-upper aren’t necessarily lazy or in a rush. Sometimes, they just want to get rid of the house, even for a meager price. Major maintenance issues such as leaky roofs, broken floors, or shabby exteriors can’t be economically fixed. They’re better off sold for a low purchase price. There might be an old-house-lover who will willingly renovate it.
Real estate experts recommend selling a fixer-upper as it is if its issues can’t be fixed at a low cost. Since we’ve already established that old-house-lovers might be interested in such a fixer-upper, sellers shouldn’t have a problem. But if they want to sell their fixer-upper for a higher value, then renovations should be considered. But again, that depends on the home’s issues.
If the sellers can do some minor repairs — like fixing a leaking pipe, clogged drains, or flickering light bulbs — they should proceed with those before selling the house. Resolving those maintenance issues can go a long way. It can make a rundown house look more livable because the basics are in good working order. A repainting job is a minor repair sellers can do as well. A fresh-looking exterior and well-maintained essentials are good selling points of a fixer-upper. A well-known listing realtor can help market that house for a fair value.
If sellers are in a rush, they can still do minor repairs to boost the home’s value a little. The key is to create a clean canvas. That’s removing all clutter, scrubbing all surfaces (especially the kitchen counters) clean, doing a deep clean, and patching all cracks and holes. A repainting job, once again, is necessary for this scenario.
Disclosing any potential deal breakers is crucial for sellers, too. Some sellers might hide it, which is unheard of, but good sellers don’t. Buyers and sellers can negotiate more efficiently if both parties are clear on their expectations. A seller of a fixer-upper might not have a perfect home to offer, but if their buyers know exactly what they’ve signed up for, all will be well.
So that’s how buyers and sellers can meet halfway regarding a fixer-upper. Buyers should be realistic with their budgets, while sellers should be honest.