Buying a fixer-upper home is becoming more common because of the number of foreclosures across the country. Whether the home has been a foreclosure or not doesn't really matter - there are still a handful of simple tips that can save you time, money and effort when buying a fixer upper.
Tip #1: Plan Ahead Buying a fixer-upper requires more planning and thinking ahead than just buying a regular home. You will want to make a list of renovations that will be needed and then identify whether or not you have the expertise needed to do them yourself or hire a contractor. Things like removing carpet, tearing out walls and painting are all pretty simple to do - but other things like plumbing and electrical work are not so simple. Develop a plan of action as to what you can do and what you need to hire someone else to do. Keep in mind, for some kinds of repairs, you will need to get work permits from the city - so be sure to do your homework on that front too.
Tip #2: Find The Right Fixer-Upper Not all fixer-uppers are created equal. Once you know who is going to do the work, then you can find the right house that isn't beyond what you can handle with your skills and contacts. Check your local newspaper, banks and maybe even talk with a few Realtors to find a list of local houses that are bank-owned and need fixing up. Remember - there are plenty of houses on the market that are beyond fixing up - so don't get stuck with one of those or it may become a money-pit.
Tip #3: Get a Home Inspection Pretty much no matter what, there will be more going on with your fixer-upper than you will see at a glance. Whenever you buy a new home, it is recommended that you get a home inspection - but especially when buying a fixer upper. A good home inspection will be able to tell you all of the needed repairs and then you can back into how much those repairs will cost.
Tip #4: Have A Budget Without a budget, it is pretty much a given that you may end up spending too much money. Before beginning a fixer-upper project, you will want to decide on how much money is "worth it" on the project and still have a positive return-on-investment.
Once you have a budget, you will want to add at least 10% to it for "overruns" because the projects never seem to go as planned. Just to be safe.
Once you have all four of these things done, then it is time to make an offer on your fixer-upper. If you have done everything on this list, then you are going to have a much better chance of finding the right fixer-upper project, buying it at the right price and getting the right projects fixed for the right price.
Which is what buying a fixer-upper is all about and makes it all worthwhile!