Why do some buyers opt to purchase ‘fixer-uppers?’
Many buyers see the benefit in buying a home that has recently had a makeover, especially if they are short of time or cash to spend on property maintenance. These buyers would much prefer to buy a property with all-new fittings and fixtures and minimal to-do list.
As property prices rise, so does the number of people buying “fixer-upper” homes, not to live in, but to renovate and modernise as quickly as possible and then resell at a profit.
They make their money by purchasing homes that are in need of repair or updating for less than the average market value for the area, revamping them and then putting them back on the market, hopefully to sell at somewhat more than the average local price.
What should you look out for if buying a newly renovated property?
A newly renovated house is an attractive prospect, as many buyers see the benefit in buying a home that has recently had a makeover, especially if they are short of time or cash to spend on property maintenance.
These buyers would much prefer to buy a property with all-new fittings and fixtures and a minimal to-do list, even if it does come at something of a premium initially.
However, that does not mean you should let the smell of fresh paint and the gleam of new tiles go to your head. As with all property purchases, you will need to do some homework and make sure that the improvements you will be paying for are real and not just cosmetic fixes.
For example, you may see what looks like a new kitchen, but it is possible that the seller just put in a new sink, cupboards and countertops without changing any of the original wiring or plumbing, and if the house was actually built 50 years ago, that could be a serious problem for you later on.
How can you be sure the renovation has been done soundly?
You should ask the real estate sales consultant exactly what major work the seller says has done, and you may want to see a copy of any certificates of compliance that are legally required as well.
Similarly, you need to establish whether any structural changes have been made, like taking out a wall to “open up” the living areas and create a more modern layout, and if these have been signed off by an engineer or architect.
And, of course, you should check for any cracks, leaks or damp patches that could signal foundation or roof problems, as these can also be expensive and tricky to fix.
The property will most likely be empty, so you should also take the opportunity to ‘test drive’ it, and gauge the renovator’s workmanship by turning on taps to check for water pressure, flushing the toilets, checking that all the stove plates work, flipping the light switches, and opening and closing windows, doors and cupboards.
In most instances, everything will work really well, but if you do find small problems, the seller should be willing to fix them immediately in order to secure a sale. After all, for a renovator, every month that a finished house goes unsold equals holding costs that diminish their potential profit.
You shouldn’t hesitate to negotiate and make sure the property really will be move-in-ready, and that you will be able to enjoy your lovely new home without any worries.
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