Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
Have you made your wish list of all the things you crave in a new home?
If you have, you may wonder if there’s a home on earth that has all those features, at a price you can afford. Probably not, but in cases like this, it’s time to change the way you shop.
Start looking at ugly homes.
Surprised? Homes that need work, or “fixers” as they are called in the real estate industry, are the ideal choice for the picky homebuyer, and here’s why:
- They are less expensive than homes in move-in condition.
- There is typically less competition in the fixer market.
- You can customize the home to fit your home-buying wish list.
- You may be able to buy in a more expensive neighborhood, which will help boost the home’s value when it’s repaired.
- Financing options are quite attractive.
“In some markets, buying a fixer can really be a game-changer, bringing the typical single-family home into reach for a median-income household,” says Realtor.com’s Cicely Wedgeworth.
Shopping for a fixer in the Tri-Valley area
Shopping a fixer-upper house for sale may be challenging at first. Remember, these homes are typically not very attractive so you’ll need to learn how to look at them in a different light.
Forget trying to picture yourself living in the home now – picture instead what the home will be like when you’ve transformed it.
The most important aspect of fixer-upper shopping is to find a floor plan that most closely fits your needs without having to knock down too many walls.
While removing a non-load-bearing wall may cost between $2,000 and $3,000, ripping out a load-bearing wall costs $1,200 to $3,000 for a single-story home.
If the home you purchase has more than one story that price jumps to between $3,200 and $10,000, according to the folks at HomeAdvisor.com.
As you can see, the floor plan is key when looking at fixers.
Two professionals you simply must have on your side when shopping in the fixer market include a real estate agent to help you negotiate and a contractor, for obvious reasons.
Financing the fixer-upper
Once you decide on a home unless you’ll be paying cash for it and for the rehab work you’ll need to get financing. Unlike in years past, today there are several attractive options.
Our favorite programs are the FHA 203(k) loan, the Freddie Mac Home Possible® mortgage, and Fannie Mae’s HomeStyle® Renovation Mortgage. Although these programs have different qualification guidelines they all basically offer the same thing: They permit borrowers to wrap the rehab work into the financing for the home.
One loan covers both. With the FHA program, you won’t need to start making mortgage payments until you actually move into the home.
This is a significant money and time saver. First, having just one loan means you’ll save on closing costs. With all three programs, the loan amount is typically based on the value of the property when the work is completed.
The process is complicated, we must warn you, but with the right contractor and real estate agent, buying a fixer-upper property may just be the best investment you’ve ever made.
I hope you enjoyed this article. Please let me know if you have any questions. Warren
Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
DRE # 01861944
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