Should we buy an expensive home or a cheaper home where we'll have to put money into it anyways??

Question

We are in the market for a home. Should we buy an expensive home with little things to fix up or should we buy a cheaper home with things that are going to need to be done. Ex. siding, roof, ect. The payments are about $160 in difference between the homes that we are looking at. Also, they are in the same neighborhood, but the more expensive were built in the 90's where as the cheaper ones were built in the 70's. PLEASE HELP!!!!

Answer 1

I've been on both sides of this. My first home was built in 1955 and needed a lot of work, but I bought it very cheaply. My mortgage payment was about $600 a month. The home I am in now was built in 2001, needed no work at all (unless I wanted to change the interior paint color) and my mortgage payment is almost $1,300.

Which house you buy depends on what you can afford, and whether or not you like doing repairs, remodeling, etc. At the time I purchased my first house, it was all I could afford. I did a great deal of repairs and updates over 12 years, and then sold the home for $25,000 more than I paid for it. But I didn't enjoy the repairs and decided that I wouldn't go that route again.

Answer 2

Use leverage to your advantage.

Buy a home that doesn't require a lot of fixing. It's not that hard to find since a lot of sellers are desperate to sell their homes in today's market. They have been willing to spend a lot of money upgrading older houses with newer amenities and fixing up problems around the property as well.

Buy the cheapest "best condition" house you can find and pay the minimum every month. Let time be your friend and use leverage. Let the seller pay closing costs and opt for the smallest down payment possible without paying PMI. (Private Mortgage Insurance)

Give it a few years and you'll gain equity on your home enough to where you can either refinance or sell and trade up.

You'll be glad you didn't buy the more expensive house because then you will be able to have a better house in the future because you'll be able to save more money since your payments wont be so high every month and you'll still gain equity in the future. Your payments won't be so stressful as well.

Answer 3

If you bought the older home who would do the work? How much would it cost? How many years would it take for that expense to equal the $160/mo difference if you purchased the newer home?

Do you have a strong preference in one home over the other? Can you get the older home price down a bit more due to the needed repairs?

Many things to consider...bottom line, where would you be happiest at the end of the day?

Answer 4

Buy the newer home. Insulation, building materials such as electrical and plumbing, and building codes all have changed quite a bit since the 70's. You'd be buying a better house. My first home was a fixer upper that was built in 1957. I bought it in 1977. After fixing it up and selling it ten years later, I barely broke even, after cost of materials, my many, many hours of labor, costs of fixing things I couldn't fix myself, etc. What a headache. Plus, I worked in construction at the time. I said never again and have bought new ever since with no regrets.

Answer 5

If you want to get in contact with me, I bet we can make it so the payments are the same as the cheaper house. I can talk to your realtor so they know how to negotiate it properly. I work for Chase as a nationwide loan officer. You can visit Caseycasperson.com to get get any contact info you need for me.

Most people end up being happier with a home that needs little to no work unless you are in the business of flipping or if you have extensive remodeling experience. The majority of consumers who try to do home improvements on their own end hiring a professional to finish the job and it ends up costing 50-75% more than if they went with the ready home.

Answer 6

Lots of things will come into play here. Are you near a good school? Does that matter? How far to the store? Work? Gas adds up and you can't add it to your mortgage.

Can you do work yourself?

What is the quality difference? Newer homes have less problems than really old homes...SOMETIMES. Some old homes are very sturdy but have electrical problems or lead paint. Newer homes may be nicer, cleaner..but most new homes are much more cheaply made...like windows that may leak or mold.

Pick the house you like better.

Go by what you can afford and the house you like.

Answer 7

DEFINITELY buy the newest home! You can spend loads and loads of money on an older house and never end fixing it completely. Think of an old and a new car... the old car will always have problems, things to fix and will never perform as well as the new car... Same with the house. If the owner left things and things unfixed, now it will be a humongous task to fix. Let alone your time, uncomfort, search for people to do it, constant spending on new things you found problematic.
The only way I would do it is if I was in the construction business and had plenty of friends, discounts on materials, etc. and knew how to fix things on my own.

Answer 8

Buy the home you can afford. Remember all those repairs and improvements take money.

Can you do the work yourself or will you have to hire someone to do the work? This alone could make a big difference in cost.

You should be able to negotiate better pricing on the older home that needs all the work.

Answer 9

There are important variables governing a situation such as yours. If you want the property to raise in value for a possible resale.....say within 5-10 years, then the best bet is to fix it yourself and reap the profits. Can you do work yourself or will you have to hire someone?....makes a big difference in profits.

If your going to live there a long while and want to be comfortable without too much hassle....buy already done.

Answer 10

The first thing you do is NOT "talk to a realtor." The first thing you do is educate yourself on the basics on home buying. Find a good book on home buying for first-time buyers. It's vital that you understand the process and pitfalls first.