Buying a Boise Fixer Upper

If you’re in the market to purchase a home in Boise or any of the surrounding areas, get ready for a shock. After all these years of hearing about a depressed real estate market and underwater homeowners, we are now beginning to see multiple offer situations on currently listed homes.

Furthermore, the inventory of available homes is shrinking rapidly which will only serve to drive prices higher and create more competition among buyers.

If you don’t feel like entering the bidding fray, consider purchasing a fixer. If you are willing to take a chance on a less-than-perfect home you may find that, in the end, you’ll get more house for the money.

Now, before you turn your nose up at the thought of having to work on a home before living in it, and if you think you can’t afford to do the repair work, read on.

Advantages

While fixer-upper homes may not be much to look at and it may take some imagination to picture its future charm, there are distinct advantages to purchasing one. Here are just a few:

 

  • Location: Purchasing a fixer may get you into a better neighborhood than purchasing a home in move-in condition.

 

  • Price: Houses that need work are typically much less expensive and homeowners are often more willing to negotiate price.

 

  • Customization: While other folks are searching for that perfect floor plan or the right sized kitchen, usually having to conform their needs to the home they eventually choose, you can customize the fixer to fit your needs.

Considerations

Never is a home inspection more important than when purchasing a home that needs work. While much of the required work is easy to see, there may be even more damage that isn’t apparent.

 

Don’t be discouraged if an inspection shows more problems. Ask a contractor for a repair bid and renegotiate the selling price based on the new cost of repairs.

The Offer

Now that you know how much the house will cost to repair, have your Realtor perform a comparative market analysis to determine the current market value of the home. Then, deduct the cost of repairs from the value and that is how much you should offer.

Another way to approach it is to by taking a tip from the folks at Realtor.com. They suggest that you offer 20 to 30 percent below the home’s value when it’s fixed up.

However much you and your Realtor decide to offer on the home, ensure that you ask for an additional 10 percent to cover any incidentals that may occur during the renovation.

How to Pay for the Work

This is the easy part. While there are many ways to pay for renovation work, one of the easiest is with the FHA 203k program. Overseen by the United States Department of Housing and Urban Development (HUD), the 203k program is an FHA-backed loan that covers not only the cost of the home, but the amount needed to repair it as well.

This program is only available from certain lenders and only to those that intend on living in the home. I am happy to answer any questions you may have about this program and to show you Boise fixers for sale.

Below is a list of homes from IDX/IMLS that are up to date each morning Monday - Friday that require TLC.