HomeTeam Inspection Service owner Fran Grenier offers advice on buying a house in need of renovations.

In a real estate market distinguished by low housing inventory and unprecedented demand, millennial buyers who initially wanted turnkey homes have increasingly settled for homes that ‘need a little love.’ With less incentive to complete necessary repairs before putting their homes on the market, sellers are passing the buck — and the headache — onto buyers. And now, as the foreclosure moratorium comes to a close, its expected impact is an increase of fixer-uppers entering the market.

According to HomeTeam Inspection Service owner Fran Grenier, younger buyers in particular are more apt to enter into homeownership through more affordable fixer-uppers, although it’s essential they understand the breadth of challenges and costs that may lie ahead.

“When young or first-time homeowners look at a house and fall in love with it, they probably don’t touch or look at much below the surface,” Grenier said. “They probably don’t go into the attic or the crawl space, up on the roof or spend much time in the basement, especially if it’s unfinished. Unfortunately, that's generally where they should have started, because that’s where the story of a house lies.”

Grenier, who owns a HomeTeam franchise in Woodstown, New Jersey, says getting a home inspection when buying a fixer-upper is a simple matter of math. “When someone buys a house, it’s a lot of money — whatever the amount, it’s a substantial investment and likely the most that a person can afford,” he said. “So, when you think of it that way, the cost of an inspection is a very small amount of money, whether you’re learning about serious issues or just getting professional knowledge about the state of your home.”

With that in mind, Grenier offers a number of tips for fixer-upper buyers as they navigate home ownership for the first time:

Identify the Red Flags. “Significant cracking is a red flag that a home has foundation issues, which can lead to moisture and ultimately mold,” said Grenier. Asbestos products, which were used liberally in homes built in the 50s — from the ductwork to the hot water pipes, roof shingles to roof siding — can be another big concern, he said, especially when they’re loose and dusty. Long periods of exposure to high levels of asbestos in the air can have negative effects on one’s health.
Be Aware of the Big Ticket Items. Separate from red flags, big ticket items are pricey but predictable. “A roof can be a big expense, but it’s a pretty straightforward project,” Grenier said. “Likewise, replacing old wiring isn’t cheap, but it’s easy enough to rip it out and replace with new wiring.”
Don’t Let Cosmetic Issues Scare You Off. While outdated kitchens and baths might be a turnoff and potentially an added expense, they’re not an emergency, said Grenier. “When you’re buying an older home, you’re going to have to deal with imperfections and projects,” he said. “You’re going to find a little rotted wood here and there — it’s an old house. It happens.”
Run the Math. Once you have an understanding of what exactly needs to be fixed in the home, it’s important to work it into your overall budget. “If you offered $20,000 over list price and now you find out the pool lining needs to be replaced, a $15,000 expense, you need to factor that in so you understand the true cost of the home,” Grenier said.
Know When To Walk Away. According to Grenier, there are certain problems that can turn a home into a money pit, and mold is one of them. “Mold grows into the walls and causes health issues for some people,” Grenier said. “Once it gets in the walls, you’ll have to gut the home down to the studs, so it’s a huge, overwhelming project that in the end might now be worth it.”

Despite the potential pitfalls of buying a fixer-upper, Grenier said HomeTeam takes a non-alarmist, educational approach that allows buyers to make an informed decision. “Everything is fixable — it’s just a question of how much it’s going to cost,” he said.

In today’s hot market, when people might be tempted to skip an inspection in order to move a deal along, it’s never been more important to get a home inspection, said HomeTeam President Adam Long. “For first time buyers especially, a home inspection is the first step in learning about the inner workings of their home, understanding what they have to do to maintain it and getting a full picture of the cost and work necessary to keep it in working order. Educating homeowners and allowing them to make informed buying decisions is our mission and passion.”