1) Location really is everything but varies for everybody. For me I wanted to be close enough to walk to stores, restaurants and bike to the beach. This meant very close neighbors and a smaller lot size. Consider your commute to work, the school district, taxes, and home owner's association fees that may apply before signing on the dotted line. While you are limited only by your imagination and budget for what you can do to a house, you can not move the house if ultimately you are unhappy with the location.
2) Really size up the neighborhood. We invested in a transitional area where some houses are in the Parade of Homes while others are literally falling apart. This is a riskier investment and you need to consider your ROI or return on investment. You may have a stellar house but never get back what you put into it if others do not feel the same about the neighborhood. The condition of your neighboring homes plays a huge factor in your own property value so choose what is best for you.
3) Require a home inspection and be there for the walk through. In our case the home came "As Is" which means we could not request any changes be made before we moved in. After buying two homes I would spend an extra hundred dollars or so to get a second opinion because things are often overlooked. Ask a lot of questions. Below is how I would characterize issues I've found when shopping for a home but feel free to Google away and get a professional's opinion during your own search:
No Big Deal:
Needs a new roof - Hiring a professional will only set you back a few thousand and you can often request a price reduction unless it is a short sale or foreclosure.
Dated Décor - Paint, carpet, and hardwood are relatively inexpensive and with so many click and lock varieties on the market engineered or laminate floors are a relatively easy but time consuming DIY project. There are other awesome products available to paint cabinetry and even wall tiles in the bath or kitchen.
Needs a new water heater or AC condenser - These should set you back $2,500 or less if professionally installed so shop around. Also check with your local utility company because many offer rebates or tax incentives if you go with an energy efficient model which will help offset some of your costs.
Needs new appliances - Once you recover from sticker shock if this is your first time or it's been a while, you will be glad you upgraded because you will notice a difference on your monthly utilities bills.
Proceed With Caution:
Needs a new furnace - Like the water heater or AC condenser this is also an opportunity to go more green, but the cost will go up if you have an older model or new duct work is required. Worth the expense because you will save so much on your utilities, but a hard pill to swallow if it is an unexpected expense.
Visible water damage - Investigate further. A leaking or burst pipe that has been repaired or replaced may be the culprit and could be an easy fix with some drywall work and paint. If the damage was more extensive you may have mold issues or spongy wood which is a more costly fix, but not necessarily a deal breaker depending on the amount of damage. Find out the history and get some quotes on fixing the problem before making that offer.
You Want to Open Up the Floor Plan - Before you get ahead of yourself with mentally knocking down walls, have a builder or structural engineer take a look to see which ones are load bearing. Essentially these are exactly what their name indicates, they hold the load of the floors and/or roof up so it will require a structural engineer and possibly an architect to design the concept you are looking for and ensure the structure is properly supported. Even if the wall is not load bearing it may require rerouting some of the mechanicals that were running through such as electrical, plumbing, or venting.
Spongy Floors - This can go back to water damage and may not be a big deal depending on the extent. If you were planning to replace the flooring anyway, it is relatively easy to replace a section of the sub floor that goes underneath, just be sure that the floor joists are in solid shape or you may have a bigger issue on your hands. Susceptible areas tend to be near the bathtub or toilet where slow leaks may have gone unnoticed.
Make A List and Check It Twice:
The home has older windows and doors - These are quite literally an energy suck! Drafts going in and out are overtaxing on your furnace and AC which means they will not run at their full efficiency and will likely shave off some of their life span as well. Since you are paying for a replacement the windows are custom made and will cost several thousand dollars depending on how many windows are in your home and how elaborate the window shapes are. Save yourself a hassle and buy pre-hung doors which are much easier to hang than just a new slab.
The Exterior is Fatigued - You may luck out and need a few cans of paint on this one, just know that painting is a maintenance with no end in sight that is required every 5 years or so depending on the material and the climate you are in. Upgrading to a vinyl or fiberboard requires less maintenance but does not come cheap. This is literally a "you get what you pay for" scenario so don't be stingy and live with the drab until you can afford the fab because you will have to see it every day!
The kitchen or bath is beyond a mini makeover - If you are handy or you have some handy helpers both of these rooms are completely doable to revamp yourself. If you are keeping the same basic configuration you should be able to swap out the old fixtures but a new layout will likely require a professional for electric, plumbing, and gas. An HGTV worthy do over can be done for under $15,000 in a kitchen for new cabinets, solid surface counters, appliances, and flooring. A 3 piece bath can be done for under $10,000. If you opt to hire out the work then your prices will jump significantly so bear that in mind when making a decision. If you go with custom cabinets, gourmet appliances, high end counters, and extras such as radiant heating, then the sky is the limit for pricing.
Needs new plumbing or electric - This can snowball depending on the age and condition of the home. If you are unlucky enough to have the old nob and tube wiring then you may find new wire mixed in with the old creating potential fire hazards and requiring your entire house to be rewired to code. With plumbing the problems generally surface outside where you tend to forget about them. Here is one of the tree roots from our neighbor's pine that literally grew through our sewer and we had to replace the entire main running to our house last week. That definitely "wasn't on the report" in the words of Mike Holmes!
To the left of the pipe is a 3 foot long tree root that was inside of the old sewer pipe.
Red Flag, Swim at Your Own Risk:
Structural Issues - Most people will run at the sight of crumbling or severely spider veined basement walls and unless you get the house for a crazy low price, this is your best bet. The one part that often gets overlooked though is the sill plate. This is the wood that sits on top of your basement walls or crawl space. If one section is rotting it can be fixed and the bill shouldn't cause you to have a coronary, but pay attention to the condition of the wood before you agree to risk it. If you have concerns then have it assessed for termite or ant damage because if they are in the basement then it is very likely they have made their way into the walls as well. The most overlooked portion is often hidden by the porch. Know before you buy that anywhere concrete touches wood it will eventually rot. Not the end of the world, but if the whole thing needs to be replaced it can add up quickly. If there is insect damage that has gone untreated it is probably best to bug out of the deal!
Mold - Mold is a nasty pest that spreads like wildfire. What you see in the crevice of the shower grout at the open house is likely behind that tile too. Mold in a basement indicates that water or excessive moister is down there so you may have water problems on your hands. If you are in flood prone area then it will continue to be a problem for your health and your pocketbook. Just like water damage, it is best to know the extent of it before agreeing to proceed. If you were planning to gut the bathroom then minor mold in a bathroom is not a big deal. If it is caused by a roof leak then you could be looking at a new roof and a lot of new drywall. If the basement is the issue then don't fall for the siren song of a beautiful home design because a wet basement just doesn't go away!
4) If hiring a contractor get at least 3 to 4 quotes and require references. Follow up and check them out with the BBB to see if they've had any complaints or claims filed against them. Never pay anyone just for an estimate or hire anyone who requires full payment before the work begins. A reputable company may require a retainer fee or a portion for the materials up front, but always wait on final payment until the work is 100% complete. If you feel in any way bullied or pressured follow your gut and find a new contractor.
These are some issues I have personal experience with and I have categorized them by difficultly and expense in rectifying them. We bought our project home as a foreclosure and we knew it had some issues, but never realized the extent of them. Any remodel or renovation we have done has taken longer than planned and cost more than anticipated. If you have an absolute maximum budget of $8,000 for a bathroom, then plan a $6,000 project and choose your materials accordingly because it will likely end up costing $8,000 by the time you are done. On a bank loan they refer to this extra money as a contingency, but as homeowners we often forget to leave wiggle room in our smaller remodeling budgets. I am definitely guilty of looking at a budget on my excel spreadsheet and assuming that I could upgrade to granite counters only to find out that all the drywall had to be ripped out because of moisture and that the tile guy came in $1 a square foot higher than anticipated which put me above my carefully planned allotment. I hope you find this helpful and I would love to hear any additional tips or experiences you have to add!
Good to see these helpful information here,Thanks lots for sharing them with us.
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