Are you undecided on whether to buy a home that needs a lot of work or build a new home? As a realtor,, I see this situation all the time. There are so many questions and factors to consider. Here is a high level idea. There is so much more that goes into this kind of decision process. Each situation is so different. If you want to buy a fixer-upper, here are a few things to take into consideration.
If you are buying a foreclosure or an estate home, there are no disclosures. So in any home purchase, get an inspection. If the price is good, this could be a great way to go. Once you get the inspection report back, review it or hire a contractor to help you. If there are major issues, this could make a good deal go bad in a heartbeat. So get some quotes on all the items that need to be repaired, changed, or added. Take your initial purchase price and add the cost for the repairs or enhancements. Are you within your budget? If you are going to flip the house, will you be able to get your investments back out of it? If you are going to live here, make sure you do the job correctly. Also, keep in mind, when starting a project; you can encounter additional unknown items occasionally. Sometimes, we can walk a home and visually detect items that need repairs. However, the inspector will go beyond that. Always have a number in mind that you want to spend on a home, and a number for the repairs or enhancements you want to make. If you decide that the home you thought you wanted needs way too much work, you might want to keep looking or build.
If you decide to build, again, establish a budget. If you go this route, you will need to find a lot or land. Sometimes the land might have water or sewer, or can connect to local, verses adding those items. If you have to add a well and septic, this could cost you a big chunk. How big of a house do you want to build? A custom builder might be a tad higher than those tract homes. Compare prices. Once you decide this is the route you want to take, add the cost of the land, possible improvements, and the estimate of the home. For the estimate of the home, a builder can give you a ballpark square foot average. The builder is not able to give you an accurate number not knowing what all you want in your home. If you have a budget, give that number to the builders that you interview.
This is just a high-level thought process. If you are totally unsure, you might want to talk to a realtor and/or builder for assistance. Compare your home options based on your budget. Don’t go outside your means. If you go outside your means, this could not only cause a financial burden, but you just might not like the house anymore. Just weigh out your options. Do your homework. This can be fun.
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