The Meaning of a "Fixer Upper"
In real estate, a "fixer upper" refers to a home that needs a certain amount of attention and renovation. The work can be primarily cosmetic, structural or a combination of the two. The meaning of a "fixer upper" can vary significantly between properties, but the sales price of the property should reflect the scope of the work involved.
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Definition
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A fixer upper is property, typically a home, in serious need of repair. If a home is advertised as a fixer upper, potential buyers can expect that a variety of renovation projects will be needed to bring the home up to code or up to a livable standard.
Types
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The two main types of renovations involved with a fixer upper are cosmetic and structural. Cosmetic renovations can mean replacing dilapidated kitchen cabinets, replacing ruined floors and updating the bathroom fixtures. Structural renovations are often more costly and can lead to necessary cosmetic renovations. The front porch may be falling in, the roof may leak and the plumbing may need to be replaced in a structural renovation.
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Inspections
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Potential buyers should thoroughly investigate the necessary renovations before purchasing a fixer upper. Repairs are not always visible, such as electrical problems, and one type of repair can often lead to another. For example, replacing the wiring can lead to wall damage, which necessitates additional sheetrock repair. The same goes for plumbing renovations, roof and foundation repair projects. Buyers should consult a certified home inspector or a licensed contractor to understand the overall impact of any necessary renovations.
Price
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The sales price of a fixer upper is often below the market value of a move-in-ready home in the same neighborhood. The market value of a home is based on recent sales prices of similar homes in the area. The price of a fixer upper should reflect the necessary work required to bring the home to code and to make it as inhabitable as the other homes currently on the market or that were recently sold.
Conclusion
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Purchasing a fixer upper can mean a bargain for potential home buyers, but the cost of the necessary renovations must be factored into the overall price. Buyers on a limited budget may find it easier to purchase a fixer upper and then make the repairs over time. A fixer upper is an attractive option for buyers with renovation skills.
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