Saskatoon Mortgage Broker shares article on Fixer-uppers

Fixer-uppers not for the faint-of-heart

Article by Gail Johnson, Globe and Mail, September 23, 2014

“When Eileen Muzzin and her partner, Dan Pedersen, were searching for a home in Vancouver, they knew they wouldn’t be buying a place with granite countertops or a peekaboo view. With a modest budget – by Vancouver standards – they ultimately decided on a fixer-upper on the city’s east side.

The couple got a 2,000-square-foot home with walls painted red and gold, a weak electrical system, various objects buried in the backyard and a kitchen that was last renovated in 1961.

“We were digging in our yard and found a rolled-up carpet two feet down,” Ms. Muzzin recalls. “There were really old bricks there too, which we ended up reusing between our garden beds.

“We basically bought the crappiest house in the neighbourhood we wanted to live in,” Ms. Muzzin says.

The two were smart to buy in a community they coveted. There’s truth behind the cliché “location, location, location.”

“You can fix a home but you can’t fix a neighbourhood,” says Vancouver real estate agent Kel Parry.

What the home also had was good bones. The trick to purchasing a fixer-upper without ending up with buyer’s remorse is distinguishing between a home that has “potential” and one that could turn out to be a disaster.

To do that, a home inspection is a must. But that’s just the starting point, says Mr. Parry, who himself bought a fixer-upper with his wife many years ago in North Vancouver.

Hire a contractor to give you estimates on fixing problems. “If you can, get two or three quotes. Once you start getting those numbers down, tack on another 30 per cent for contingency,” he says.

“The first thing I tell clients when they’re considering a fixer-upper is, whatever you’ve budgeted, make sure you have more than that,” he adds. “There are always hidden costs.”

Aside from using savings, credit cards or lines of credit for HGTV-style projects, buyers can secure financing at the time of purchase through mortgages such as the CMHC Improvement program or Genworth’s Purchase Plus Improvements program.

Fixer-uppers typically need expensive renovations of kitchens and washrooms. Other common and costly jobs include repairing or replacing the roof and windows as well as upgrading the electrical and plumbing systems.

Some repairs are deal-breakers, with structural and foundation problems typically falling in that category.”

To read the full article, please click here.

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