The median fixer-upper would save buyers only $11,000
By Jeff Sorg, OnlineEd Blog
(September 1, 2016) – Fixer uppers are appealing to some who think they can make a sizeable savings or profit with a flip, but according to a recent report by Zillow Digs® the average 8% discount these buyers save on price might not even cover necessary renovation costs. The median fixer-upper would save buyers only $11,000 for renovations, the report says.
Zillow Digs analyzed nearly 70,000 listings for fixer-uppers from around the country to see how their list prices compared to their estimated values. If renovation costs exceed the home’s discount, then it may be more cost-effective to buy a similar home that doesn’t require renovations. Fixer-uppers were identified based on listing description keywords that signaled the home needs work, like “TLC,” “good bones” and “fixer-upper.”
“Fixer-uppers can be a great deal, and they allow buyers to incorporate their personal style into a home while renovating, but it’s still a good idea to do the math before making the leap,” says Svenja Gudell, Zillow chief economist. “While an 8 percent discount or $11,000 in upfront savings on a fixer-upper is certainly a good chunk of change, it likely won’t be enough to cover a kitchen remodel, let alone structural updates like a new roof or plumbing, which many of these properties may require.”
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