Fixer-upper or move-in ready home: Which is right for you?

When you’re getting ready to buy a home, there are lots of things on your mind. You have to juggle your mortgage financing, moving timeline, budget, and a whole bunch of other items. One thing you may not have thought to ask yourself is whether you should go for a fixer-upper or move-in ready home. Most people automatically think about turnkey properties when they consider their homeownership options. However, should you consider a fixer-upper? Both options can get you into homeownership, but they come with very different experiences, costs, and long-term outcomes. 

Fixer-upper properties

Let’s start by defining what a fixer-upper is. This is a property that needs major repairs or renovations before it feels like home. This could include cosmetic updates, like new flooring, paint, or appliances. However, it often involves serious work, such as replacing the roof, upgrading plumbing and electrical systems, or gutting an area entirely. 

The advantages of a fixer-upper

Lower purchase price

Right off the bat, you can see the most obvious appeal of this property type, and that is affordability. Since these homes aren’t in the best condition, sellers often list them below the market value of similar move-in ready homes. If the seller does not want to put in the time or money to make repairs before listing, they will likely need to accept lower offers, making the home more affordable.

Room to build equity

Building home equity is a huge advantage for home owners, and purchasing a fixer-upper gives you the opportunity to build equity through improvements. By investing in upgrades, you can significantly increase the home’s value. Whether you plan to resell or stay put, this is a major plus.

Full property customization

Everyone likes to personalize their house so it truly feels like home. Buying a fixer-upper means you don’t have to settle for someone else’s style. Every aspect of the home is tailored to you, so you can make the home uniquely yours.

The drawbacks of a fixer-upper

Costs of renovations

The purchase price of a fixer-upper itself may be low. However, renovation costs can add up quickly. Depending on the extent of the work needed, you could be looking at tens, or even hundreds, of thousands of dollars. Without careful planning, you could end up spending at least as much as you would have on a move-in ready home.

Financing complications

Conventional lenders don’t typically approve mortgages for more than the current value of a property. That means securing the necessary financing can be tricky. Buyers may need to turn to special products like purchase-plus-improvements mortgages or private loans, which can make the financing process more complicated.

Move-in ready properties

A move-in ready home is exactly that! This is a property that is in good shape and does not require any major work before moving in. Home buyers can simply move in and start unpacking once they take possession.

Move-in ready advantages

Final costs are more predictable

With a move-in ready home, your upfront costs are much easier to understand. All you have to worry about is your down payment, closing costs, and monthly mortgage fees. While unexpected expenses can still pop up, they are much less frequent and costly.

Lower workload

This benefit is obvious! With a move-in ready home, you don’t have to do any work. The home is ready for you as soon as you get the keys. This is a huge plus for those who do not want to take on extra work and spend their time on renovations.

Financing is easier to secure

Because the home is already in good shape, securing a mortgage will be easier. You won’t need to worry about arranging extra financing for renovations, or paying higher fees for a private lender. This process is much more straightforward.

Move-in ready drawbacks

Higher purchase price

Naturally, the biggest disadvantage of a move-in ready home is the cost. Since minimal repairs are required, buyers will need to pay more for these properties. This can be especially difficult if you don’t love every aspect of the home as-is.

Trickier to personalize

Move-in ready homes are, of course, not designed by you. This often means living with design aspects you wouldn’t have chosen yourself. While you can still make cosmetic changes down the road, you may find yourself having to make do with what you have until you’re ready to invest in improvements.

Both fixer-uppers and move-in ready homes can lead you to successful homeownership! It’s just a matter of deciding what works best for your situation. As mortgage brokers, we can help you explore both options. We’ll look at your budget and your goals, ensuring you feel confident about your next steps.

If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.