by Judy Zabriskie

Created on: April 15, 2008

When making major purchases, I usually make a list of all the pros and cons. Buying a house, especially one that is in need of major work is no exception.

First we will start with the PRO side:
1. The house is in a great neighborhood, perhaps it is the worst house on the best street.
2. The house has great "bones" so to speak. It has the basics with which to work.

3. The major systems are in good working order and if they are not, they are a relatively easy fix one that you will definitely get 100% return back on resale.
4. The school system is one that is coveted in that area.
5. This house price is way below the "comps" for the area, so a little elbow grease will net a great return on your investment in the future.
6. Something draws you to this house whether it is the floor plan, the outdoor living space, neighborhood, etc.

Next we will go with the CON side:
1. It needs too much work. This may be a tear down not a fixer upper.
2. All the major operating systems are in disrepair.
3. The landscaping is beyond a simple do it yourself fix.
4. Structurally the house is not sound.
5. The schools are good but not great.
6. The neighborhood is on the fringes of where you really want to live, but just not quite there.
7. The neighborhood is in "transition" leaving doubt as to where it is transitioning to and how long it will take to be up and coming instead of down and out.
8. Never TRUST a realtor, get your own home inspector or a contractor that you trust to go over the house prior to buying it so that you will get an accurate assessment of future costs.

This being said, you must take into account, the sale price of the house and just how much you are willing to spend. This must be realistic. Obviously, if someone is asking $500,000 and your target number is $200,000, this is not a match. Decide what your budget constraints are, this being with the cost of repairs and then begin negotiations. Remember there are always those hidden costs that are never anticipated so I would definitely allow a cushion (i.e. we needed a new well immediately upon moving into our house since the realtor "inadvertently" sent the water sample for testing from his house which has city water, claiming it was from our house which has well water) and the day we moved in the water turned murky brown/orange thereby necessitating our first project be a much needed well replacement. There was a $4000 cost we were not expecting. So be ready for those "little" things, but if you find that diamond in the rough I say go for it. We did and we could not be happier. Our house, with a LOT of elbow grease and a little contracting (we are mostly do it yourself type people) we have doubled our investment in 6 years!

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