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8 Things To Do After Purchasing A Fixer Upper
If you’re a fan of HGTV’s “Fixer Upper,” there’s a good chance you’ve caught yourself dreaming about how you might customize an outdated house bought at a rock-bottom price.
You don’t have to be a home improvement TV show junkie to be intrigued by houses on the market that aren’t exactly move-in ready. Especially if it means saving on the purchase price of a house, many homebuyers are inclined to take on renovations and updates to get the keys to a new home.
In a February survey of 1,000 consumers considering purchasing a home in 2017, online brokerage Owners.com found 51 percent of the homebuyers surveyed would consider a fixer-upper.
But if you don’t have an eye for home improvement and what it costs – and Chip and Joanna Gaines aren't walking you through the process – you might find yourself lost once you’re the owner of a house with '70s wallpaper and holes in the stairs.
Here are 8 things to do once you’ve purchased your fixer-upper.
Close first, then go in-depth with contractors. Home improvement shows like “Fixer Upper” and “Property Brothers” often depict homebuyers touring potential buys with the real estate agent-contractor team, but that’s not usually the case in real life. Most design-and-build firms or construction companies work separately from real estate agents and will want to put in the work with existing homeowners, rather than those who haven’t yet bought a property. Take other guesses at face value. You probably don’t know how much every update you want to make is going to cost as you close, but don’t take guesses during the homebuying process as accurate.
Find the right contractor for your project. Once you’ve bought the home, it’s a matter of finding the right contractor – or contractors, depending on how you want to do the repairs and renovation. As with hiring any professional, you should do your research. “You want to check referrals,” says Dina Dwyer-Owens, co-chairwoman of Dwyer Group, a family of companies that includes Neighborly, which works with home service franchises throughout the U.S. and Canada, including Molly Maid, Mr. Rooter and Rainbow International Restoration. Neighborly provides local reviews and contact information for businesses, but it also vets each of the franchises it associates with.
Call in advance. Whether you’re doing a couple rooms or the entire house, a renovation is a big project, so get in touch with contractors well in advance of when you’d like to begin work. “Planning is the biggest key. … The sooner you get ahold of that service provider to begin that process, the better,” Dwyer-Owens says.
Don’t ask for estimates – you set the budget. There are a lot of logistical differences between a water heater replacement and a kitchen upgrade, but a key difference is the way costs are determined. You’ll get quotes from a company to replace a water heater. With a kitchen overhaul, you tell the contractor what you want to spend. Outline the desired budget and what you’d like updated, and the company will provide you with a plan for the project time frame, hardware that can be incorporated within the budget and expected subcontractor involvement, plus the expected overall cost depending on your preferences. For companies with a good reputation, Fleming says you won’t see much of a difference: “The pricing should all be right around the same for the same scope of work.”
Decide if you want to do it all at once or in parts. A big factor in determining the budget – and what you may have to spend on the side – is how much work you want done at once. Some homeowners can afford to remain in their previous home or rent elsewhere while the entire house undergoes a remodel, while for many, a gradual renovation makes it possible to stay put while work is done. “They can kind of move from room to room and try to live in their house the best they can,” Fleming says. “It’s a very invasive process either way, but it’s a little more manageable.”
Consider how you use the home before you picking out features. Many construction firms that specialize in renovations – from demolition to interior design – ultimately want to meet your needs living in the home. So before you tell your contractor you’re dreaming of a tempered-glass, floating vessel sink in your master bathroom, first describe if you use the sink simply to wash your hands or if it’s an integral part of your morning routine with needed counter space for toothbrushes, facewash or makeup. “We’ll definitely make it pretty, but we’re more interested in, ‘I want to have seating for 12 for Thanksgiving dinner,’ ‘I like to cook for my kid’s track team,’ stuff like that,” Fleming says.
Consider your return on investment. When it comes to a fixer-upper, some buyers hope to make it the home they’ll live in for the next 40 years. For others, it’s a house to transform and, in a few years, sell for a sizable profit. But you want to keep your home in line with others in the neighborhood. If you transform it into the best house on the block by a mile, when you put the For Sale sign out front, you may not see as much money come back as you spent on the home plus updates. “If you’re completely doing an overhaul and updating absolutely everything, you’re still only capturing half the market because now you’re probably out of the affordable price range of people who might have bought it for what it was,” says Scott McGillivray, host of the HGTV show “Income Property,” who partners with Owners.com.
When work starts, take a step back. You might think you’re keeping a sharp eye on your investment by hanging around the worksite daily, but no one likes a micro-manager. Especially when you’re working with a contractor who manages the project from start to finish – subcontractors included – don’t waste your time inquiring about construction details you don’t need to be concerned with. If there’s a problem or an update, a good contractor will notify you immediately. “Let them take the wheel – you hired them to do that,” Fleming says.
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Robert is the co-founder and Broker at PAX Real Estate in Prince Frederick, Maryland. He brings with him over 30 years experience building successful companies as an entrepreneur and business owner. W....