4 THINGS I WISH I KNEW BEFORE BUYING OUR FIRST FIXER UPPER
My husband Chris and I are 1 1/2 years into our first fixer upper and we've learned a lot of lessons along the way. Some lessons I wish I would've known beforehand though. Here are 4 things I wish I would've known before buying our first fixer upper.
1. DON'T FORGET ABOUT THE CLOSING COSTS
This seems obvious right? But let me explain. About 2 weeks before we were set to close on the house, we found out our closing costs were almost double what we had budgeted for. Miscommunication was the main reason why this happened. Thankfully my parents happily loaned us the extra money to cover the costs, but we quickly learned the importance of clarification.
It would have been so helpful if we had just said, "Ok, on the day that we sign to close on the house we will have to give you a check. What is the EXACT dollar amount we will need to pay?" Had we asked that question so bluntly, we would've known about the hidden fees and unexplained expenses. As much as possible, try to avoid estimations and get as exact as possible with your banker.
2. INSPECT, INSPECT, INSPECT
I understand that in some areas you have to look at the house and put an offer on the house the same day because of how crazy the market is. However, if you have the opportunity I highly recommend you look at the house several times. (Pro Tip: Stop by the house when it's raining to see if there are any water issues in the basement or yard.)
Bring someone who has experience with fixer uppers if you can. Thankfully, my brother has renovated a home before so he knew what to look for and what projects tend to get expensive. His knowledge helped us to pinpoint the problem areas and be realistic about whether or not this was an attainable project within our budget.
Don't be shy. Our first walk through was super awkward and we didn't know what to ask. But after my brother came with us the second time we INSPECTED this house. We got in the attic, looked up the chimney, inspected the wiring, and tested the windows. We didn't want any surprises so we asked as many questions as we could possibly think of to be as informed as possible. I mean, we're shelling over some major cash so we deserve to know what we're buying right!?
Get a home inspection done. I repeat, get a home inspection. Especially when you're looking at a fixer upper, it is so important to hire a professional to look over everything! Their job is to get up close and personal with your potential home so that you don't find any surprises after closing. One thing I appreciated about our inspector was that he looked for termite damage, foundation issues, and even tested the dishwasher to make sure it ran a full cycle. It can cost up to $500 but it's worth it to know exactly what you're getting into.
3. HAVE REALISTIC EXPECTATIONS
At the time when we saw our fixer upper on Zillow, we had no intention of buying. In a matter of two months we went from almost renewing our apartment lease to moving into our first home. Being that we hadn't planned on this, we didn't save up any money to do renovations. We literally had $0 for renovations because we spent all our saving just to pay for closing costs. (I don't recommend this BTW)
So we bought a fixer upper with $0 saved to do renovations. Awesome right? We decided we would just redo one room at a time and save up money for renovations as we go. Although this sounds super responsible, with our income and level of student debt we still owe (student debt sucks) we really quickly realized saving up the "extra" money at the end of the month just wasn't happening.
If you have enough extra money at the end of the month to actually make headway in your savings account, I definitely suggest going this route. You'll take on projects at a slower pace but you'll also have plenty of time to think about what design works in your home and what your style truly is. Plus you'll avoid getting into debt which is always a win.
For the rest of us newly graduated college students who still have college debt, car loans, and are taking in a slim paycheck...the "save as you go" route may not work. About a year after moving in, I started talking to Chris about getting a small loan to tackle the main living areas.
Now, let me clarify something. Chris and I HATE loans and getting a loan for anything is always our last resort. But in our situation we had enough money to pay towards a loan that would give us the opportunity to tackle some more expensive projects we had coming up. Saving up $15,000 to gut and remodel our kitchen would have taken us 5 years but we highly doubt we'll even be in this house 5 years from now. It just made sense for us at this time.
So, my word of advice. Be realistic in the renovations you'll be taking on and the amount of money it will cost. Have a financial game plan. If you want to save money as you go, set a dollar amount you want to save per month and include that in your budget as if it were an expense. Don't tap into that unless absolutely necessary. If you plan on getting a loan, know the exact amount you'll have to pay per month and whether or not that's realistic within your budget.
4. CONSIDER RESALE
Of course, when renovating your home you should always design it with your style and make it your own. However, the more we dive into our own fixer upper the more I'm realizing how important it is to keep resale value in the back of my head. There's two questions to ask yourself when making decisions.
1. WILL I MAKE MONEY OFF OF THIS UPGRADE?
I like to ask myself, "Is this a forever home purchase?" Some things are absolutely stunning but won't make you a dime when it comes to selling. For example, I would LOVE to have a brick backsplash in our kitchen. But with where we live, and the value that homes nearby are selling for, we would put a butt load of money into a freaking awesome backsplash that most likely wouldn't add a ton of value to the home's selling price. AKA that's a purchase for our forever home. (We're doing subway tile instead in case you're wondering.)
2. WILL ANYONE OTHER THAN ME LIKE THIS DESIGN CHOICE?
I've got a different style preference than most people which is awesome because our home is so different than the homes you see in our area. However, that also means people might not be as open to my style choices because they're just not used to it. Be bold and be you...but keep in mind that someday someone else is going to need to love it too.
Buying a house is stressful. Buying a fixer upper is more stressful. I'm still learning so if you guys have learned anything from buying your first home or fixing it up, I'd love to hear some of your life lessons in the comments below.
Until next time,
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