Mistakes to Avoid When Buying a Fixer-Upper

It takes foresight and planning to make a fixer-upper project go as planned without any headaches. That’s why we recommend taking a few key steps as you work through a home renovation.


Select the Right Contractor for the Work

Finding the right contractor for the right price can be a daunting task. Here are a few quick tips to help you get there:

  • Word-of-mouth: The best way to find a contractor is from hearing about them from someone you trust. Barring that, ask prospective contractors for referrals and contact them.
  • Check Credentials: Make sure your potential contractor is licensed, insured and bonded. While not mandatory, check to see if they have certifications from national trade organizations (e.g., Certified Graduate Remodeler and National Association of Home Builders).
  • Check Reviews and Ratings: Read the reviews that other customers have left on legitimate review sites.
  • Get Multiple Quotes: This will give you a better idea of what the project is really worth. Beware of low bids as some contractors cut corners in their work so they can outbid other contractors.
  • Plan Ahead: In most areas, quality contractors are booked weeks or months in advance. If you want a quality contractor, and you do, then plan ahead for this waiting period.


Get the Proper Inspections

One of the keys to a successful fixer upper purchase is getting the home properly inspected. With any home purchase, you’ll want an inspection done by a certified home inspector. Checking for structural damage, especially the foundation, is one of the most important things to have checked. Fixing a foundation can get costly, and you need to understand what kind of repairs you’ll be up against. Other inspections you can have done for a fixer-upper include: Roof certification, pest inspection, sewer line inspection and an engineering report.


Get the Right Loan

There are home loans out there specifically set up to fund both the purchase of a home and its renovation. At Gateway, we offer several options for the home buyer looking to take on a renovation project. With a government-backed FHA 203(K), you can purchase and renovate a fixer-upper with a down payment of only 3.5%. With the Fannie Mae HomeStyle you can fund the renovation and purchase of multiple home options, including nontraditional property types. Keep in mind also that different versions of these loans fund smaller and larger renovations. A Gateway Loan Originator can help you better understand the differences.


Have a Realistic Timeline Expectation

When it comes to renovating a home, any experienced contractor will tell you that it almost always takes longer than originally projected. Consider that the larger the renovation the more likely it is that you’ll hit a snag, like mold behind the sheetrock or plumbing that needs upgrading. But even when you don’t hit an obvious setback, minor disruptions can add up. In order to save yourself possibly disappointment and frustration, take the original projected timeline and double it.

What can be more exciting – and rewarding – than purchasing a home and renovating it to custom fit you and yours? With a little forethought and planning, renovating your home can turn out to be a hugely successful move, both personally and financially.