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September 21, 2011 2:33 PM   Subscribe

Crash course tips on homeowning/homebuying? What do you wish you would have known before buying a foreclosed fixer-upper? What new (to us) home tips can you share?

So, it looks like we are in the final buying stages a lot sooner than I had expected. There is a house selling for extremely cheap (under $20k with all taxes, commissions, warranty, insurance included) in a somewhat run down neighborhood near where we live. We did a walk-through with our realtor and were surprised that apart from a few spots where the roof had leaked through the ceiling, it looked very habitable. The realtor told us that there was most likely a problem with the plumbing and that some or all of the pipes may need to be replaced.

We are purchasing the house from the bank. It was foreclosed quite a while ago.

I was expecting quite a bit more time to do research. Hive mind homeowners, what did you learn the hard way? What do you wish you had done differently before the home inspection had gotten underway? Where did you spend money unnecessarily, and where do you wish you would have laid down the cash?

What projects were feasible, and what do you wish you had outsourced to a professional?

I am not handy. My boyfriend is not handy but more so than me. We will be within a mile of a Home Depot. We are located in Pittsburgh, PA.

Any anecdotes, tips, tricks, advice, book recommendations, and stories are welcomed and appreciated. Thanks!
posted by amicamentis to Home & Garden (27 answers total) 12 users marked this as a favorite
Instantly, if not sooner, have a professional home inspection done, right now. A roof that has leaked through the ceiling may just be a "problem with the plumbing" or it could be severe water damage in the attic. There may be other hidden issues an inspector could find in 30 seconds that you won't even know to look for. The Realtor doesn't give a shit; once you sign the papers they're gone. You need to know the actual facts about this turkey before you buy it.

Also, the inspection report will be a checklist for things you need to fix in the future should you go ahead and buy.
posted by seanmpuckett at 2:41 PM on September 21, 2011 [9 favorites]

Home inspectors can't see behind walls. A house like this, with potentially huge moisture problems, would not be something I'd be OK taking on, and my husband is extremely handy. How much have you budgeted for a potential new roof and new plumbing, and to fix any moisture damage you find behind walls or under the floor?
posted by rabbitrabbit at 2:44 PM on September 21, 2011 [1 favorite]

Good news homeowners! You're about to become handy.

Have the roof fixed first, water will destroy the house.
"The realtor told us that there was most likely a problem with the plumbing and that some or all of the pipes may need to be replaced."
I'm guessing this means all the pipes have been removed for salvage. Have your plumber use PEX to replace the pipes, it's cheaper and has no salvage value.

You'll need tools, start with a good screwdriver, flashlights, tape measure and a hammer. It would be great if you have time to work on the house before you move in, living in a semi-livable space is remarkably stressful.

Definitely paint before you move in.
posted by Marky at 2:49 PM on September 21, 2011

The best thing I did while househunting for fixer-uppers was get in touch with a general contractor and have him visit the house with the real estate agent and me and give me an estimate of how much work needed to be done on it and how much it would cost.

Then again, ultimately, I bought a place that didn't need any significant repairs or renovations.
posted by deanc at 3:04 PM on September 21, 2011 [1 favorite]

However you arrive at an estimate for repairs -- definitely do put together an estimate. Then double it. Maybe even triple it. That's how much out-of-pocket cash you'll really need to spend to fix the house.
posted by zagyzebra at 3:09 PM on September 21, 2011 [2 favorites]

Hive mind homeowners, what did you learn the hard way?

The advice to enlist the services of a professional home inspector is solid. Don't forego this crucial step!

Don't buy before you are financially prepared for the costs of owning a home. There are the costs to live in a home (the things you listed like mortgage, taxes and insurance) and there are the costs to own it. Every little thing that could possibly go wrong with the house (not that it will, but it could) will be yours to fix. I know you've given that some thought since you remarked that you're close to Home Depot, but the costs can be overwhelming. There will always be something to fix and a new project to work on. Are you fully prepared for that?

Do you like the neighborhood? I mean, really like the neighborhood. Have you driven it at night? Will you feel safe? You called the neighborhood "somewhat run down." Do you want to live there, not just in that house?

There will be other houses. If this isn't the right one, don't jump before you're fully prepared.

Be intentional.
posted by heathergirl at 3:12 PM on September 21, 2011 [2 favorites]

Neither of you are handy and there's a roof to replace and plumbing to replace? Get the names and numbers of good contractors and start getting quotes.

My father taught building trades for decades and he is not comfortable doing plumbing work. He and my mother built their house from scratch, just the two of them and he paid money for someone to do the plumbing, electric, and HVAC.

But other than possibly biting off way more than you can chew, here's some things to keep in mind:
-a house that has been uninhabited for a while will have some issues with drains. They may be clogged or the plumber's putty around the drains may be dry and cracked. This will cause leaks.
-pest control may also be an issue.
-how is the wiring? Less than awesome neighborhood + empty house can equal stolen copper wires throughout the house.

And seriously, don't move in until a massive amount of the work is done. Anything that isn't done by the time you move in may never be finished. Seriously, my folks have lived in their house for 12 years and the bathroom trim still isn't painted. Once you learn to live with something undone, it's way harder to get around to doing it.
posted by teleri025 at 3:15 PM on September 21, 2011

Definitely get the thing inspected. Definitely. Like, make a satisfactory inspection a condition of the sale.

Then do what deanc says and get a contractor out there to give you an estimate of what needs to be fixed and how much it's going to cost. I guaran-damn-tee you that it's going to be way more than you think on both counts. You'll definitely wind up spending more than the contractor estimates (though maybe not on him), so keep that in mind.

Then talk to your realtor and talk about how much homes in the area are selling for. It's entirely possible that even with a purchase price of $20k (in Pittsburgh!), the only way to rehab this thing is to spend so much on it that you'll never, ever be able to make it back in the selling price. I had my eye on a place here in town that I could have picked up for $15k, but it'd take at least $80k to rehab, minimum* and nothing within about twenty blocks has sold for more than $45k in the past decade. Depending on how much you're looking to spend here and what you can expect to get for it down the road, this whole thing may just not be worth it.

That being said, look into city, county, state, and even federal programs for this sort of thing. There are FHA mortgages out there that will let you fold renovation costs into your mortgage. There may be redevelopment grants for bringing the thing up to code. There may be tax abatements or other incentives, and though that isn't cash on the table, it's not to be sneezed at. This could also significantly change your calculus and might actually turn a complete money pit into something a little more reasonable.

Speaking of money pits, watch it. Take notes. It's a comedy, but it's only funny because it's all basically true. If you can watch that and even remotely still want to be a homeowner, well, more power to you.

Finally, and above all, do not buy this house if you're anywhere close to your budgetary limits. Some friends of mine refer to money in two denominations, "blips" and "units." A "blip" is $100, because that's about how long it takes to spend it. A "unit" is $1,000, because that's about how much it takes to get anything serious done around the house. If you aren't in a position to think about spending those amounts of money that way... you probably aren't ready for this.

*New roof, new floors, new windows, new furnace, new plumbing, tearing out four bathrooms and redoing three of them, new kitchen, etc. Basically, the foundation and structure looked reasonably sound, but the thing had to be completely gutted.
posted by valkyryn at 3:16 PM on September 21, 2011 [3 favorites]

Just to be clear: I am NOT saying don't do a home inspection. Absolutely do one, a lot of issues can be found by a good home inspector. I am saying, be aware that home inspections have limitations, the main one being that they can't see what's going on behind walls.
posted by rabbitrabbit at 3:17 PM on September 21, 2011

Inspection now. A roof leak almost inevitably causes water damage to more than just the ceiling under it. In my house, for instance, it also caused two walls in that room--and the ceiling and walls in two rooms on the floor below it--to be so waterlogged as to be able in some places to push your finger into the drywall like softened butter. My home inspector caught this right away with an instrument that measures moisture content. I wouldn't have thought to touch the walls. I was too busy imagining where all my furniture would go.

Also, if the plumbing is outdated and needs work, chances are good the electric is old enough that it won't suit your needs either.

Is there a basement, and has it ever flooded? A house inspector will be able to show you telltale signs.

Other things:
- Termites?
- Water pressure?
- Age of furnace and water heater?
- Age and quality of roof?
- Contents and last cleaning date of chimney, if any (even a furnace chimney)?
- Contents/condition of external dryer vent? (I had a housefire from an improperly cleaned one).
- What type of heating and is it sufficient/efficient for PGH winters?
- Police reports for the area?
- What are the neighbors like?
posted by ImproviseOrDie at 3:31 PM on September 21, 2011 [1 favorite]

Also factor in how much you will be paying in rent/mortgage while your house is being renovated. Some renovations you can live with, some are just impossible. Whatever time estimate your contractor gives you, add a big chunk of "leeway" time to that. In our case, it was an extra 2 months.
posted by hellochula at 4:23 PM on September 21, 2011

Absolutely renovate before you move in. Otherwise, you'll always find reasons not to do it.
posted by His thoughts were red thoughts at 4:42 PM on September 21, 2011

I have invested in real estate for a long time. I have bought several fore-closures in the last few years. I am currently in contract to buy another. I am also a building contractor, and I specifically look for fixer-uppers.

The very first thing to do is: Roof and walls. Make sure the shell of the house is secure. No water leaks. Once you have that, then you can start fixing the rest, then what you have is secure against further damage from the elements.
posted by Flood at 5:01 PM on September 21, 2011 [1 favorite]

We live in Pittsburgh. Think about getting the air tested for radon. It's not an expensive test and you could avoid living in a house that might give you cancer.
posted by miaou at 6:05 PM on September 21, 2011

Seconding or thirding getting that property thoroughly inspected by a pro before you sign anything. Otherwise you'll have no idea what you may be facing in regard to damage and necessary repairs or even roughly how much it will all cost.

If you decide to go for it, invest in a set of Time Life Home Repair books. Best investment I've ever made. With that you'll be able to figure out what you can do yourself and what needs to be contracted out. Even better, once you've read up on things, contractors won't be able to pull the wool over your eyes because you'll know exactly what's going on. You'll also find out that there are more things than you can imagine that you guys can repair yourselves. The instructions are pretty concise.

Another very important thing to consider is your mortgage situation. You may be able to tack on an additional $10k to $20k on your mortgage to help get that property ship-shape. (Check the comps for that neighborhood to see what other properties are going for.) If not, maybe a few $k on a second mortgage that you can add to your first after a year with a refi.

As mentioned above about $, count on spending between $10 and $20k to get this property rehabbed. That may seem like a lot, but like I said, check your comps. As long as you're below comparable properties in the neighborhood, you should expect to get a good return on your investment. Or, better said, it's a good investment.

*homeowner/former landlord/former property manager/ former fixed every darn thing without prior experience guy.

Also, Good Luck! I'm very excited for you. This is very good stuff!
posted by snsranch at 6:53 PM on September 21, 2011

I want to leave you with three simple thoughts which are kind of wordy but...

The first one is that the bank did an inspection and comparables already and they priced it at $20K for a reason. It's your job to figure out what is that reason before you buy it. If you stroll into this thinking you're getting the deal of a lifetime by thinking you're a lot smarter than a bank that does this every day.... well, I guess stranger things have happened.

The second one is that since you are not handy you are going to pay for labour as well as materials. And when you pay for skilled labour you are typically going to pay upwards of $40 an hour to maybe $120 an hour depending on what trade. I don't know how much money you make personally but consider that you are looking at months of labour to turn this house into something that you can trust will not leak / electrocute / burn down / explode / fall on / poison you and any possible offspring and or pets and or guests. Here is an analogy: you are thinking of buying a rustbucket jalopy that won't start because it has no motor, wheels or seats and you want to pay someone to turn it into reliable transportation. A sane person would just buy the reliable transportation to start with because it will be cheaper and quicker to get to the endpoint.

Okay and the third thing is that you might find it safer, saner, quicker and cheaper to buy it for the land, scrape the questionable house off it (demo is pretty cheap), and put up something simple and understated in its place. (If I might recommend structural insulated panel construction....) You'll get new components, top quality insulation and, since you already own the land, and be done much faster than a full-speed down-to-the-studs "fixer-upper" reno.

Of course if the home inspection report (remember the home inspection report?) actually does say that the house is in pretty good shape and you can make a go of it for being livable for less than half of what it would cost to rebuild then ... well ... You've beat the bank!

A lot of this would change if you were handy and you wanted a project like Flood does. Anyway, good luck and make a sane choice considering everything you want to do with your life. Because whole-house reno can and will eat years.
posted by seanmpuckett at 6:59 PM on September 21, 2011 [3 favorites]

I'm of the opinion that if you're not handy and don't intend to become so, then buying a fixer upper is dumb. If you're going to pay other people to fix your house up for you then buy a house that's already been fixed up. Avoid the risk and the dust and noise and chaos.

Also, as has been noted above, a cheaper-than-average house is not necessarily a good deal. If other houses around this house aren't worth way, way more than $20k then this house probably isn't worth fixing.
posted by jon1270 at 7:48 PM on September 21, 2011 [7 favorites]

A fixer upper in a good neighborhood and a great location can be a great deal. A fixer in a bad neighborhood where you don't want to live forever (or at least a number of years) can be a very bad deal. My gut says 20k below is not that great of a deal but it really depends on your area and the comps.

The only thing to do before an inspection is to decide if you are serious about it.
posted by amanda at 9:42 PM on September 21, 2011

If there was a problem with the pipes, there could be hidden mold problems.

A while back we saw a house for sale in the 'Burgh for $25K, in our (pretty nice) neighborhood. When we walked up within 10 feet of it, we couldn't breathe because the air reeked of spores; looking in the front windows, virtually every inch of the walls, carpet and ceiling were covered in big black mold patches.

So...horror story, I guess. Find out why the house was foreclosed and anything else about its history, if you can.
posted by daisystomper at 11:01 PM on September 21, 2011

Response by poster: Thank you all so much for the advice. Getting a home inspector is definitely, definitely on the top of our to-do list. I had not thought about doing a radon test, that is probably a good idea. Please keep the answers coming, if you have any more words of wisdom!
posted by amicamentis at 5:59 AM on September 22, 2011

You sound like you have little idea whether or not you're getting in over your head, and that fact alone makes me wonder if this is not a good project for you. Fixer uppers can be good deals, or they can be life-sucking nightmares -- speaking as someone with one from the latter category. Since you don't seem like you have enough knowledge to know the difference and thereby protect yourself, my advice would be that you proceed extremely cautiously. If this house was a good deal once the cost of repairs was included, why didn't an investor with a more seasoned eye already snatch it up?

If you do proceed, I second the advice to not just get a home inspector, but to call a few contractors and ask them to provide a bid on the work. People say to double (or triple) the estimates provided by a licensed contractor, and that is for good reason. (Memail me if you want to hear the differences between the bids and what I'm going to end up paying.) Please at least double the lowest bid you receive. Then compare that cost to the cost of buying a house that is not a fixer upper. Learning to be handy can truly be fun. But realizing you made a poor investment is not. Not being able to sell and also not having the money to make the house livable is not. Waking up eight times a night ready to put on your shoes and headlamp to tack down tarps because you think it might be raining and your roof isn't watertight is not. So take the highest bid you get (even if you don't work with those people, assume they are right), and add 50-100% more.

You really do need to plan around the worst case scenario. Once you buy the house, that worst case scenario could be your reality, so start from the worst assumptions and then rule the problems out. For example, is it a fairly dry season? I so, I'd ask all the inspectors whether they can find any evidence that you have a drainage problem. I'd assume that you have a foundation problem until persuaded otherwise. Those evident water stains could indicate other water damage problems like mold or rotted joists. That $10-20k estimate above could be really low. I applaud your willingness to learn to be handy, but it can take a long time to figure out how to do things, and there could be certain things you probably won't feel you can take on yourselves at all (like jacking up the house to replace the foundation). What is your ability to pay for repairs? Know what you are getting into here. Don't let the bank rush you. I hope that my comment turns out to be off base. But if you look back at my question history, you will see optimism, and that optimism turned out to be misguided. Truly, I'm a bit frightened for you. Protect yourselves.
posted by slidell at 9:17 AM on September 22, 2011

Why does the realtor think there are problems with the pipes? How much corresponding mold is there? My gues is quite a bit.

It sounds to me like you should not by this house.
posted by craven_morhead at 3:11 PM on September 22, 2011

Also, someone above mentioned programs for financing improvements where the costs are rolled into your mortgage. If you're doing that program, pick your lender carefully. They have different skill levels.
posted by slidell at 4:16 PM on September 22, 2011

My (former) home that was worth $115k in 2003 (that had a few cosmetic issues and not much else) just sold after foreclosure for $30,000, so the price doesn't necessarily mean it is a dump.

Anyway, my recommendation to you is to make sure you have a solid, solid emergency fund before you buy a home. Suze Orman says 6-8 months (and suggests 20% down on the property exclusive of that emergency fund, but I don't know if that applies for such a low priced home). Things are going to go wrong, even if they aren't major. It's a big adjustment from just "calling the landlord" to "running to Home Depot to get a water heater because yours blew up."
posted by getawaysticks at 7:17 AM on September 23, 2011

Hive mind homeowners, what did you learn the hard way?
That if you allow the realtor to handle the home inspection, you can walk into your new home and discover the a/c, hot water and several electrical outlets do not work. Basically, get your own inspector; if you can, be present when it happens (or nearby).

Also: Can you look at public property tax records and find the former owners to speak with? If not, can you see through the paperwork trail if any major repairs/issues have been dealt with in the past? These things can be learned with a bit of diligence. And by that I mean, find out if it's been flooded, had any fire damage, etc. When was the house built? If the wiring's really old, you won't have grounded outlets. Rewiring a house is time-consuming and expensive. Forgoing that can lead to the power shorting out, throwing breakers and even cause fire hazards if you overload a circuit.

Finally: Paying property tax at the end of the year can be difficult. If you buy the home without financing, you'll have to pay it in one big chunk, correct? The first year it'll be cheap; once you make improvements and the city re-values the property, you might be in for a shock when you pay taxes in subsequent years. I paid about $8900 per year for property tax and homeowner's insurance on top of the house payment; originally, payments were $1200/month, which I could afford, but with repairs, tax, and insurance it was actually about $2100/month. Have you accounted for that already?

What do you wish you had done differently before the home inspection had gotten underway?
I would have spoken with people in my neighborhood about how frequently they replace exterior paint/siding, what kind of foundation they have, educated myself better about drainage/runoff issues with roofs, gutters, and landscaping; I'd also have asked how frequently storm or wind damage compelled them to make exterior home repairs, such as roofing materials and fencing. Is this a standalone house with a yard? If so, is the fence in good repair? What kind is it? If it's chain link, are there dogs roaming the neighborhoods? Homeless people? Only bringing this up because having a fence can make a huge quality of life difference in addition to providing privacy and security; fences can cost 3-6k or so to build if you want a nice one.

I also would've taken a portable electronic device and tried out every single outlet in the place and measured how much hot water is available with the water heater (had to replace mine the 2nd day of living there, and it was brand new - just terribly cheap) and whether or not two people can shower in the mornings, either separately or one right after another.

Are you guys taking care of the yard (assuming there is one)? If not, can you see if any neighborhood kids/teens are willing to do it or hire a service? Otherwise, plan to buy an edger, mower, clippers and ladder at minimum (tree limbs can't be touching the roof or else your insurance company and city code enforcement will be calling).

Where did you spend money unnecessarily, and where do you wish you would have laid down the cash?
I wish I would have paid for a 21 SEER Central HVAC unit instead of a 13 SEER; double-glazed windows and additional insulation instead of granite countertops (they're great, but they still get damaged and at $3,000 or so, that money would've been put to much better use finishing out an enclosed and gated fence, installing a heat pump, etc.).

If you hire a contractor, make sure they're licensed, bonded and insured; ask to speak with former clients and see examples of their work if you can. If something goes wrong or you get into a dispute about the cost or timeline, this will protect you.

If you can, install a programmable thermostat in the house. Also, GET THE HOUSE TESTED FOR MOLD and a few other things - see list here. This is important, because if you're buying a home that's basically a biohazard, getting homeowner's insurance will be difficult (or impossible).

Consider this worst-case scenario: You buy the home, and it's unsalvageable. Are you willing to raze it to the ground and put new construction on the lot? I don't know what land prices are typically like there, but I paid $20k for an empty lot in 2002 and built property there, so it's not that unusual.

Plan for every home repair, upgrade and/or major appliance replacement to cost ~$3,000 and you'll be in good shape; some will be more, some less, but that's about average, in my experience (except central a/c and furnace - you'd need about 9 grand for that).

Good luck - and make friends with some of the guys at Home Depot. They may be able to direct you to good contractors if you don't know where to look.
posted by Unicorn on the cob at 9:48 AM on September 23, 2011 [2 favorites]

- Pittsburgh police reports: http://communitysafety.pittsburghpa.gov/Blotter.aspx
(Unfortunately only the most recent week is available, but it's a start.)

Elsewhere on that site is also information about what neighborhood-watch and similar groups are operating in your area. Especially if the house has been abandoned for any length of time, it may be useful to get in touch with someone and find out if they've noticed anything going on there...

- Not a substitute for the home inspector, but you should check what the county thinks of the house. See http://www2.county.allegheny.pa.us/RealEstate/Search.aspx
(It can be out of date or plain inaccurate, but it's at least worth checking.)
posted by FlyingMonkey at 7:39 PM on October 12, 2011

Any update?
posted by slidell at 8:58 PM on October 16, 2011

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