Some Buyers Slowly Learn to Like Fixer-Uppers
Most buyers want a house, not a new project. But some eventually opt for a fixer-upper due to buying frustrations and the realization that sweat equity can be profitable.
NEW YORK – Eight months ago, Matt Klinger and his wife Nicole had some tough decisions to make. Should the Southern California couple with three small kids under the age of 5 who are outgrowing their condo buy a new house in one of the costliest housing markets in the country? Or should they invest in a home in need of some tender loving care, otherwise known as a “fixer-upper,” a house that’s available to buy at a lower price because it usually requires expensive repairs and sweat equity?
After much thought and discussion, they opted for a 100-year-old, 2,500-square-foot fixer-upper with a few structural beam and termite issues. The house got a kitchen upgrade and needed a new roof.
“You begin asking yourself, ‘How much work are you willing to put into it?’” Klinger said.
Often an opportunity for entry-level buyers to get into homeownership, fixer-upper houses are increasingly popular by homebuyers of all income levels, as higher home prices and interest rates limit purchase power.
The median cost of a fixer-upper home in the U.S. is around $225,000; that’s about 45% cheaper than turnkey homes in cities that are the same size, according to Porch, a home improvement site connecting homeowners and contractors. By comparison, the median price of an existing home is around $403,800, according to the National Association of Realtors.
“The market is both competitive and challenging right now,” said Mike Hardy, managing partner for Churchill Mortgage in Los Angeles. He owns several fixer-uppers under repair in Southern California and advised Klinger on investing in an older house.
“You have to look at your budget closely and decide what’s in your best interest – to buy now or later, new or old?” Hardy said. “It’s a process not to be taken lightly.”
Are fixer-upper houses cheaper?
Klinger paid $1 million for his Craftsman-style home, considered a bargain in California, the most expensive home market in the nation. His fixer-upper purchase is on par with other California cities including San Jose ($1.3 million), San Francisco ($1 million), and Los Angeles ($900,000), according to StorageCafe, a storage marketplace.
The expanded kitchen with plenty of natural wood cabinetry and open dining area of the Klinger’s two-story home allows their children, Cooper, Chloe and Clara, to run around freely. The space becomes not only a place to cook with room for a large dining room table, a couple of nooks with small bar chairs to complement that wide play space for the kids.
So far, the Klingers invested about $200,000, a chunk of which went to expand the kitchen. Matt even helped tear down the wall with a sledgehammer that opens up the kitchen to the dining room. Nicole did her fair share as well by helping put together a bench and laying down some of the new flooring.
‘Do what I had to do’
When Stephanie Zolomij bought her fixer-upper two-story townhouse in suburban Philadelphia in July 2021, she couldn’t move in until four months later. Why? On the day the single mom of 5-year-old twin boys was supposed to close on her home, the “dark and dingy” basement got flooded. She said the water heater “rotted out.”
Undeterred, she agreed to replace the heater and rip up the basement’s damp old Berber carpet and got a credit back on her purchase.
Then there was the roof so decayed that her homeowner’s insurance wouldn’t even help cover it.
“So, I got a new roof,” said Zolomij, who works in forensic psychology to help get mentally ill violent offenders competent to stand trial. “This house met my expectations, but I knew I would have to pay a little something to get it into shape.” So far, she’s spent about $50,000 to get the 1,600-square-foot townhome to where she wants it and pay for unexpected repairs.
But, due to supply chain issues, there was still a two-month backlog to do that, even after Zolomij paid extra to rush orders.
“That was a drag,” she said.
Then the pipes broke on a new kitchen sink a contractor installed and began “leaking everywhere.” And, when a replacement valve for the main water line broke, Zolomij’s basement flooded – again.
“Twice in two months,” she said, with a wry laugh. “ (Expletive) unbelievable!”
Undaunted, Zolomij replaced all the lights and ceiling tiles, and got “beautiful fluffy, clean carpet throughout.” Zolomij then refurbished the bathrooms, complete with new toilets and fixtures.
“I’m compulsive and a very hands-on person,” she said. “I replaced every light switch, face plate, you name it. I had to do what I had to do.”
That “can-do persona” epitomizes Zolomij, said Kristina O’Donnell, a Philadelphia-area Realtor who helped Zolomij find and even redo her fixer-upper after nearly three years of searching for a more spacious and affordable home.
“She didn’t give up. She knew what she wanted and is willing to do whatever it takes,” said O’Donnell about Zolomij.
Zolomij still wants to touch up the kitchen, and redo her outdoor deck as well as one of the bathrooms, in case her mother wants to move in someday.
Additionally, Zolomij said her townhouse’s heating, ventilation, and air conditioning system “haunts me” because it’s 30 years old. It works fine – for now.
“But when it goes, that’s going to be another big chunk of money,” she said.
Zolomij said she and her sons, Abel and Spencer, who just started kindergarten, are in her fixer-upper for the long haul.
“I don’t ever want to pick up and move,” Zolomij said.
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