We recently bought our third home. We had a neighbor ask us if the home we had purchased was the one that needed big basement repairs. As a matter of fact, it was.
Our home came with a nice crack in two basement foundation walls. It is likely one of the reasons it sat unsold until we purchased the home. It had other reasons for sitting on the market for 10 months including outdated plaid wallpaper, linoleum flooring and a high asking price considering the work it needed.
Why did we buy a home in need of big repairs?
Fixable Big Repairs
Yes, the home we bought required a significant foundation repair, but it was fixable. Our realtor instructed us to hire a structural engineer to perform our home inspection to evaluate the foundation issue in order to better understand the needed repairs.
During the inspection, the structural engineer was able to explain that the type of foundation crack our home contained was typical of homes in our area that were of similar age. He further explained that fixing the crack would prevent further damage and would ensure the structural integrity of the home. Fortunately, we were under contract on the home during the wettest year in our area on record. Despite a crack in the basement foundation wall, no water was entering the home. All three structure companies and the structural engineer felt the dry basement despite the crack, was an excellent indication that the recommended repair would fix the issue.
My husband and I are not engineers, but we did our homework. We researched the recommended repairs and the companies who had given us estimates before following through with our contract on the home. As much as we could, we budgeted the necessary repairs, our mortgage payments and all the other updates that we intended to make on the home over the following year.
Equity
Our home sat on the real estate market for 10 months. In that time, numerous buyers viewed the home but passed on it for various reasons. Many likely walked away due to the needed foundation repair. Over the 10 months, the owners became more willing to accept an offer that was reasonable considering the needed repairs and updates. Once repairs are made and updates are completed, we will gain equity in our home.
When we decided the home was a good fit for our family, we made an offer telling the sellers we would ask them to make zero repairs. Did we want to spend our hard earned money on repairs? No, but it was more important to us to obtain a home within our budget and with room to gain equity.
Fixer Upper
Because we were looking for a fixer-upper, we knew there would be some necessary home repairs in the process. Fixer uppers are usually older and will require some maintenance. Despite the foundation issue, it was the first home we had viewed in a year that required the least amount of repair work.
Do we recommend always purchasing homes in need of big repairs? No. We have personally declined multiple homes because the needed repairs were beyond our budget and over our heads. If you are in the market for a fixer-upper, expect repairs. Thoroughly inspect the home and budget for more than cosmetic work. Purchasing a fixer-upper can be an excellent way to build instant equity in a home and may turn out to be a good investment. To read more about why be buy fixer uppers, check out this blog post here.
