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When buying a new home, the biggest thing on your mind is saving as much money as possible. Action Properties, Inc. says part of your strategy for doing that should include buying at the right time of year and hiring a trusted real estate agent who will protect your interests. It can also mean deciding between purchasing a move-in ready home and a fixer-upper.
What’s the difference between a move-in ready home and a fixer-upper? How will the decision to buy a fixer-upper versus a move-in-ready house affect your home-buying and home ownership experience? How do you determine the best option for you? These are the questions we will be answering in this article.
What is a move-in ready home?
A move-in ready home, as the name suggests, is ready for occupation as soon as you complete the buying process. The previous owner has taken the time to fix all existing issues with the building and update its appearance. When you buy a move-in ready home, the work is done for you; you can move in right after buying it.
What is a fixer-upper?
A fixer-upper home that needs a bit of TLC before it is ready for occupancy. Although the house is structurally sound, it will require substantial repairs (not just a facelift) after you buy it. With a fixer-upper home, you have to fix the interior and exterior areas of the house. That can take some time and also cost a lot of money.
The question you are probably asking is “If a fixer-upper costs time and money to get into shape, why would anyone want to buy a fixer-upper instead of the more convenient move-in ready home?” There are valid reasons why people do this, the first of which is money. But that is not the only reason for buying a fixer-upper, as you will see from the explanations below.
Pros and cons of move-in homes ready versus fixer-upper homes
Move-in ready homes
Pros
- Fixed costs: With a move-in ready home, you know exactly how much you will spend on the house. There are no hidden costs or unpleasant surprises.
- No wait time: You are free to move into your new home as soon as you close the deal. When you buy a move-in ready home, it is easier to plan.
Cons
- Expensive: A move-in ready will cost you more. You will be paying the seller for the time and trouble they took to get the home into shape.
- No customization: With a move-in ready home, you are stuck with the original owner’s design. The cost will be high if you choose to customize your new home.
Fixer-upper homes
Pros
- Cost: The number one reason to buy a fixer-upper is the lower-selling price. On average, a fixer-upper can cost 8% less than a comparable move-in ready home.
- Special mortgage programs: Buyers who choose a fixer-upper home get access to special mortgage programs that can help them further reduce the cost.
- Customization: Buying a fixer-upper home means you have more room to customize your new home to reflect your lifestyle. The property feels more authentic.
- Lower taxes: Since property taxes are based on the purchase price of a home, the lower price of the fixer-upper means you can save a lot of money on taxes.
- Home remodeling experience: You gain valuable experience from the process of fixing the home.
Cons
- Unpredictable costs: It is not always easy to determine the eventual cost of repairs because the issues with the home may be worse than previously thought.
- Stress: Not everyone has the skill or patience to manage contractors and subcontractors. This is on top of the difficulty of finding skilled and honest contractors.
- Lengthy process: You will often need permits to repair a fixer-upper home. Getting those can cost money and take time, making it hard to predict the duration of the renovation.
- Hard to find: Finding a fixer-upper with just the right amount of repairs is very hard. Most sellers prefer to fix and sell their homes as move-in ready homes.
Should you buy a move-in ready or a fixer-upper home?
The decision comes down to three questions:
How much appetite do you have for risk? How would any unexpected events affect your finances and your family? How old are you?
How much time do you have? Do you have access to alternative accommodation while a fixer-upper is being repaired? Or do you need to move out of your current home ASAP?
How much do you know about home remodeling?
A fixer-upper home can be a great way to save money or even make money (flipping houses), but making this strategy work requires some expertise. If you are caught in the middle of deciding on what kind of home to buy, l can help you.
