FIXER UPPER MYTHS& FACTS: What You Should Know BEFORE You Buy

"A home will only sell for what the market can bare. What this means is that no matter how many upgrades were made, or how much money has been invested in the upgrades, a home will only sell for what the majority of homebuyers are willing to pay."

Before deciding that your next home must be a fixer-upper, you should do some homework into what to expect when purchasing these types of homes. Many prospective homebuyers tend to have a romanticized version of the entire process, and are quite shocked when confronted with the hard reality. Fixer Upper homes can often represent a good deal, but there are some points that a homebuyer should be aware of before making that offer.

MYTH #1 . . .

I can make a "killing" in the real estate market by buying a run-down home, for tens of thousands of dollars less than the average home, fixing it up, and then immediately selling it for full price, or more.

FACT #1 . . .

Most homeowners looking to sell their "fixer upper" home understand that they will have to list their home at a price that reflects the cost involved in restoring the home to its original condition. The asking price of a fixer upper is usually calculated so that the savings represented by the lower than average market price is roughly equal to the amount of money that a buyer could expect to spend on necessary renovations. Updating the "look" of a home, or upgrading to higher-end finishes, is not included in these calculations, and you should be careful not to spend so much money on renovations that you are unable to recoup your investment.

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