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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Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.