Some houses need a little TLC to become beautiful homes. These old or damaged homes often have layers of charm underneath the wear-and-tear, and many prospective homeowners have trouble deciding between a newer, more expensive, move-in ready home and buying a fixer upper. When approaching the lovable —but potentially problematic —fixer upper, it’s important to weigh the pros and cons carefully.

Here are the Pros and Cons of Buying a Fixer Upper

Pro: The Price is Right
The primary appeal of buying a fixer upper is its low price. Whether the house displays cosmetic defects, interior damage, a rough exterior, or something else, these noticeable issues inevitably drive down the price. Evaluate the home’s listing price, its condition and how much repairs could cost carefully to be sure you’re getting a good deal.

Con: Fixer Upper Financing Trouble
Though the price might be lower, getting financing when buying a fixer upper can be tough. Most lenders don’t offer favorable financing options for a home that needs a lot of work. It may be a struggle to find a suitable lender and the rates or mortgage structure is likely to be less-than-ideal.

Pro: Fast Track to a Great Neighborhood
Buying a fixer upper is an easy way to get into a great neighborhood that you otherwise might not be able to afford. A fixer upper can bring you closer to top performing schools, your workplace, parks, or other amenities.

Con: The Uncertain Future of Buying a Fixer Upper
Unless you’re a seasoned house-flipper, it can be difficult to know how much work the house really needs. Damages that look like cosmetic defects may actually be symptoms of structural damage, mold, rot, insect damage, or other costly problems. When buying a fixer upper it’s important to get a detailed home inspection to ensure you’re prepared.

Pro: Building Equity
If a move-in-ready home already has the most modern amenities and the best features in the neighborhood, it’s difficult to make any improvements and increase the home’s equity. Buying a fixer upper gives you room to grow and every improvement will translate into value you earn through sweat equity. Even a few simple DIY projects that build equity can make a big difference.

Con: Unexpected Problems
A fixer upper is likely to bring unexpected problems at inconvenient times, such as leaky pipes, a leaky roof, broken water heaters, flooding basements. Going home won’t always mean relaxing, but the start of a second job. When buying a fixer upper, make sure your life and schedule allows for flexibility.

Pro: No Bidding Wars
In a seller’s market it’s not uncommon to see bidding wars on popular, move-in ready homes. However, fewer buyers are ready for a fixer upper and many are not able to take on the job. Buying a fixer upper gives you more room for negotiations with the seller, without other buyers getting in the way.

Con: Not the Right Time or Place
Depending on the house you are looking at, you may need to be in the right situation to take on a fixer upper. If the house needs so much work that it isn’t livable, you’ll need to have another residence in the interim. If you have a family, the house might not be safe for children. You’ll also need either home improvement skills or connections with experts who can help. These two factors could make buying a fixer upper outside of reach.

Pro: Lower Property Taxes
Property taxes are levied based on the sale price of the house, meaning you might be paying taxes on an older $100,000 house with the square footage, property, and neighborhood of a $150,000 house. This will lower your monthly costs of owning a fixer upper, making it a more manageable expense.

Con: A Long, Expensive Road
A fixer upper is likely to require a steady stream of money and hard work, which adds up quickly. While budgeting for a move-in ready home concludes with the sale, budgeting for a fixer upper only begins with the sale. It takes caution and discipline to keep from going over budget. When buying a fixer upper, you’ll need to ensure that you create a realistic monthly home budget and stick to it.

Pro: It’s All Yours
Anything that needs work on a fixer upper is an opportunity for complete customization. You get to make all the decisions in your home, from new flooring to paint to new roofing and siding.  When buying a fixer upper, you can put your signature on each part of the home and truly make it your own.

Con: Old Age
Most fixer uppers need extra work because they are old. This means you’re likely to get outdated appliances, dated interior design, and low-efficiency insulation and lead paint.  You may also have outdated plumbing, problems with asbestos, faulty electrical wiring, or other hazards. It’s important have the home well inspected as these hazards could be detrimental to your health.

Pro: Tax Credits
When buying a fixer upper that’s particularly old, a percentage of qualified renovations to historic homes can be written off on your taxes. This means you acquire the full value of the equity without the full cost. A range of other tax incentives also exist for making energy-efficient improvements on everything from windows to boilers, which you may need to replace anyway.

If you’ve decided that 2019 is the year to buy a home you may be wondering about the timing. When is the best time to buy? What do you need to do to prepare  and when should you do it? This simple home buying real estate calendar for 2019 will help you plan out the process easily.

January, February and March
Winter is, in some ways, the best time to buy a home, since home prices tend to be lowest. However, this also means there are fewer homes on the market, and you might not find the one you’re looking for during this time.

Before you begin, get your financial documents in order, shop for a lender and get pre-approved for a mortgage. In the current “seller’s market” an offer will not be considered unless it is accompanied with a pre-approval letter from a lender.

To obtain a mortgage pre-approval, you’ll need a variety of documents including previous taxes, W-2s, bank account information, and credit card statements. Then you’ll want to choose a lender. You might choose your local credit union, your preferred bank, or a private lender. Take some time to shop around and see where you can get the best interest rate.

April, May and June
Make a list of wants and needs for your new home and begin searching online. Decide what you must have in a home and what you might compromise on.  Select your preferred locations and a price range that fits your lender’s terms as well as your budget. Write these things down so you have a clear reference point when you start looking at homes.

Contact a real estate agent and start touring homes.  Through these home visits you’ll become familiar with the market and develop a sense of what you can purchase within your price range.

These are the months when the largest number of homes are listed for sale.  Conversely, this also the time when you’ll be in competition with the largest number of buyers looking at the same homes you’re considering.  Greater Lansing is going through a “seller’s market” with home’s going for full price or more when there are competitive offers.  Don’t be surprised to learn that a home you looked at yesterday has an accepted offer today.  In the Spring, homes are listed and under contract within a few days.

July, August and September
You should have toured a few homes by now. Hopefully, one or two have met your needs and you may have already written an unaccepted offer on a home or two.

You would think that by now the competition has slowed down.  This isn’t necessarily true.  With more buyers than homes, there will continue to be competing offers on any home you submit an offer on.  It’s simple. If you like the home, so will someone else.

When you found the “must have” home, your real estate agent will help you  prepare a winning offer within the terms of your budget.

Once you have and accepted offer, the closing process begins.  It takes an average of about 45 – 50 days from accepted offer to closing. Pay close attention to deadlines, and stay in close contact with your agent. Inspection deadlines are very important.

October, November and December
This is the slowest time in real estate and competition from other buyers is greatly reduced.  Successful buyers who found a home are gone.  Those who didn’t probably decided to lease until next Spring.

The November and December are good time buy a home, as prices are lower and seller expectation are not as high. They aren’t seeing the same volume of traffic that occurs in the Spring and Summer months and there’s a pretty good chance you’ll be able to make an offer without being in a competitive situation.

If you’re entering the Holiday season living a home you’ve recently closed on. Just kick back and relax.  You’re now a homeowner.  Just remember to change the furnace filter.

Home prices have been rising for over seven years, and mortgage interest rates for five years. Should you wait to buy a home? The numbers say no.

According to the National Association of Realtors®, the median existing home price is more than $250,000, the highest it’s ever been.  If you wait to buy a home,  you’re losing the opportunity to build equity, or ownership, in a home of your own.

If you’re worried that homes are priced too high and you’re afraid of losing money, consider this: According to the US Bureau of Labor Statistics, prices for housing were 50.88% higher in 2018 versus 2000, for an average increase of 2.31 percent a year. The average inflation rate for the same period was 2.07 percent. Home ownership beat inflation by 0.24 percent.

Mortgage interest rates hit all time highs in October 1981, when a benchmark 30-year fixed rate was 18.45 percent (with 2.3 points paid by the borrower). The lowest took place November 2012 at 3.35 percent with 0.7 points. At the current about 4.5 percent for a conforming fixed-rate for those with good credit, mortgage interest rates are tantalizingly low.

The best time to buy a home is when you want to, not when you think the market timing is best. Unless you have a crystal ball, you don’t know if prices and interest rates will recede, plateau and or rise. Look at homebuying for the long term, and you’ll be glad you didn’t wait.

Buying a home is an exciting process, but many homebuyers are also understandably nervous. Buying a home is a big investment you’re going to have for years. That’s why it’s important to watch out for home inspection red flags that signal big problems. Some slight problems or minor defects are fixable with a bit of TLC, but some issues can seriously detract from your investment, and even endanger your health and safety.

1. Structural Problems
Structural problems top the list of home inspection red flags. Structural problems, like a cracked foundation or damaged load-bearing walls, affect the integrity of the entire home and signs of these problems should be taken seriously. When selling a house that needs work, some home sellers might not know about structural problems or they might not disclose them, so you may have to detect these yourself. A home inspector will include structural damages in their report, but you can find signs before you get to the inspection stage. Looks for these issues which may indicate structural problems.

• Cracks in the basement floor larger than ⅓ inch
• Bumps in the basement floor
• Misaligned door frames or windows
• Misaligned porch or front steps
• Walls have been removed

2. Grading
The grade or slope of the surrounding property affects the way water drains during storms or snowmelt. This subtle feature can be a big home inspection red flag if it’s not done properly. If the property slopes towards the home, even at a slight angle, it will cause water to pool in or around the home, perhaps in the basement or around the foundation. If the property slopes away from the home, but the yard forms a valley where water pools, this can also cause flooding and water problems. When studying the grade, look for the following home inspection red flags:

• The surrounding yard is completely flat
• Patches of dead grass, moist areas or puddles
• Property slopes toward the home
• Moist areas close to the home

3. Mold
Mold is often a problem if you’re buying a fixer-upper. Sometimes mold results from neglect and it can simply be cleaned up, but other times it can be a serious home inspection red flag. The major deciding factors are the extent of the problem and the cause of the mold. If mold has occurred due to a lack of cleaning and it’s isolated to small areas, the problem may be easily resolved. However, if the mold occurs due to a lack of ventilation or accumulating moisture, the mold will simply come back if you clean it, and you’ll have to fix the cause to stop the mold. This might mean replacing drafty windows, or it might mean redoing the entire attic, roof, or bathroom to ventilate the area or stop a leak. Watch out of these mold-related home inspection red flags to detect problematic mold issues.

• Large patches of black mold anywhere in the house
• A noticeable mold odor
• Bathrooms without fans or windows
• Large areas of patchy paint

4. Old Electric Wiring
Faulty electrical wiring can make it difficult to run modern appliances, and it is a leading cause of home fires, which makes it a serious home inspection red flag. Electrical wiring is also difficult to fix, making it easy to lose money on this home renovation. Homes constructed before 1930 may use dated wiring methods like knob-and-tube wiring, which can limit power output and even cause electrical fires. These wiring systems are often complex and disorganized, making future renovations difficult and expensive. They can even cause home insurance providers to refuse coverage due to the increased fire risk. If the home was constructed before 1930, ask about electrical updates or ask your home inspector if they can determine the type of wiring used. You can also look for the following home inspection red flags yourself:

• Flickering lights
• Outlet faceplates are hot to the touch
• Outlets aren’t grounded
• Certain appliances won’t work or won’t work properly
• Certain appliances can’t run together

5. Old Plumbing
Like faulty wires, faulty pipes are hidden behind walls and under floors, which makes them expensive to fix. However, this also makes it difficult to determine how big of a plumbing problem is present. Sometimes a pipe can be easily repaired or a drain snaked to fix a problem, other times the issue is much bigger. To uncover major damages or clogs, look for widespread and long-lasting symptoms. If the problem exists only with one sink, one drain, or one pipe, it’s probably an isolated incident that can be reasonably fixed. However, if all the drains, sinks and pipes show the same symptoms, there’s probably a bigger underlying issue. Watch out for these plumbing-related home inspection red flags to detect the difficult and expensive problems.

• Low drainage throughout the house
• Low water pressure throughout the house
• Water remains cloudy or discolored after running several minutes
• Faucets continually sputter
• Stained walls, ceiling, or tile
• Mold smell
• Wood rot around sink or bathtub

6. Pests
It’s almost impossible to keep your home completely pest-free, especially if you live in a rural area. However, there’s a difference between a few bugs and an infestation. If ants, termites, cockroaches, mice or other pests have taken moved in before the new buyers, it’s a home inspection red flag. In some cases, pests wander through a home and a thorough cleaning or a few traps can end a pest problem. In other cases, the creatures have nested in the home, causing structural damage and requiring full-scale extermination. So how do you tell the difference? Look for these home inspection red flags as signs of serious pest problems.

• Powdery substance around windows, door frames, counters or home exterior
• Scraping, grinding, buzzing or tapping noises
• A musty smell
• Dead or extensively damaged trees, plants or grass
• Tracks, droppings, discarded wings, or other bug parts
• Weak or hollow areas in floors or walls
• Colonies or swarms around garages, trees or neighboring homes

7. Roof
When looking for your “forever home”, the roof is an especially important consideration. A solid roof is so important that an older home with a new roof can be a better deal than a newer home with a bad roof. Besides the costs of replacement or repairs, leaky roofs can lead to other problems like mold, rot, and water damage. So how can you tell if the roof needs replacement? Look for these home inspection red flags.

• Roof replacement was never recorded
• Roof was replaced more than 20 years ago
• Excessive moss or plant growth
• Missing, curling or cracked shingles
• Dark spots or patchy paint on the ceiling
• Previous roof repairs
• Dark streaks on the roof

First-time home buyers should be especially aware of what home renovations they can handle and what do expect. Some homes with minor problems can be a good investment that will increase in value over time. However, other homes with big problems can quickly eat up your renovation budget. Watch out for these home inspection red flags and work with an experienced home inspector and you can find a home that will build equity over time.