A fixer-upper on the real estate market can be pretty tempting to get because of its below market price. However, some people fall into the traps of thinking that the house they are eyeing on is a fixer-upper when it was actually a flop. How can you tell if a house is a fixer-upper or a flop?
Many people are now into looking for fixer-uppers in the real estate market, partly due to the influence of several home renovation shows such as HGTV's "Fixer Upper." Aside from this, a lot of fixer-uppers in the market are being sold for way below market price, which makes it even more appealing to buyers.
This Old House notes that before deciding whether to buy a fixer-upper or not, one should figure out if they would be able to get the most out of the purchase. The publication advises on adding up the costs of renovating the property and subtracting it from its potential house value following the renovation.
The publication also advises that buyers should look for an inspection clause in their real estate contract should they decide to go with a fixer-upper. This clause will help assure buyers that the house is a good investment and it will also help buyers get out of a transaction should the house prove to be a flop than a fixer-upper.
Trulia also listed ways to determine whether a house is a fixer-upper or a flop. According to the publication, a cosmetic fixer-upper is a great deal because it only needs minor repairs and some DIY work such as new paint, lighting or appliances.
A downright ugly fixer, on the other hand, seems to appeal to you more than anything else. It might require a bit more work that the aforementioned fixer-upper, but several steps can be done to still make it look better after the renovation is done.
A teardown house, however, "has major structural, geological, or severe foundation or environmental problems" and it might be best for you to walk away from it. The publication likens this scenario to Pandora's box because the costs of repairing the house will be more than what you can get later on.
