Fixer Upper Or Money Pit

Dated: 12/17/2017

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Fixer-upper or money pit? How to decide

NEW YORK – Dec. 13, 2017 – With inventories so tight, some home buyers are giving fixer-upper homes a second look. The price point and location may attract more buyers to bite, even if the home needs some TLC.

But how do you tell a hidden gem from a hidden mess when shopping for a fixer-upper?

Paul Skema, president of the architecture and construction firm Roth Design + Build, and Jean Brownhill, founder of Sweeten, an online contracting service, shared considerations for home shoppers looking at a fixer-upper. Here are a few of their tips, via Curbed.com:

Determine the scope of the project
Are the renovations mostly cosmetic or structural? "Before you even look for an apartment or home, you want to understand what type of project you're comfortable with," says Skema. Projects where owners start making additions or knocking down walls can add a lot of money, time and risk. "One small bathroom renovation is hundreds of decisions you're going to need to make," says Brownhill. "You have to understand who you are as a person and how easily you make decisions."

Set a budget
After the downpayment, how much money will your buyers set aside for the fixer-upper? Factor in unexpected costs, such as planning an alternative living situation while the work is being done on the home. The architect and contractor should be able to provide you with estimates. "By setting the price, you're setting the approximate level of craft, finishes, and customer service that you're looking for," Brownhill says.

Establish a team
Larger projects require an architect, who will then hire a general contractor and then subcontractors. Homeowners will need to establish a communication path to prevent delays or budget pitfalls. And don't just hire the lowest-bidding architect or contractor, Skema warns. "Higher-quality firms limit the risk of the project," Skema says. "Cheaper firms, many with less knowledge and less experience, will require more involvement from the homeowner and ultimately bring more risk." Select a team with the right experience, solid references and a communication style that complements your own.

Meet the neighbors and the building association
Significant renovations may require approval from the homeowner's association. Meet your potential neighbors beforehand and warn them so as not to aggravate them. Learn about the permit process through your city's building department ahead of time. Upgrading plumbing and electrical systems, moving walls or changing structural elements will probably require a permit.

Protect yourself
Make sure the contractor has both liability insurance and workman's compensation, and make sure he or she has a Florida license. Also, ensure that your homeowner's policy will protect you from any contractor-caused issues.

Source: "Considering a Fixer-Upper? Here's What You Need to Know," Curbed.com (Dec. 6, 2017)

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