So, we bought an abandoned house...
5 things to know about buying an abandoned house or a true fixer upper
I am someone that lights up at any opportunity to salvage an antique, restore furniture that is beaten and worn, or even adopt and care for an animal that needs a patient home. And I love a good fixer upper house. There’s just something about second chances and pouring love into a forgotten something and seeing it come back to life. It gives me a sense of purpose and is what makes me feel whole, really. Several years ago, I was driving in my hometown and spotted some yellow very close to the road, through a thick, overgrown yard. I thought “Now THAT is an abandoned house.” I mean, the yard was so overgrown I didn’t even realize there was an attached barn to the left of the house. Seriously. My town is not easy to buy in, and my next immediate thought was “Well, I’m definitely going to buy that house”. An absolutely and impossibly out of reach dream: to buy an antique farmhouse by the ocean, in this impossible to buy in town. I saw this yellow house as a slightly less out of reach, yet still nearly impossible opportunity. And the December before last, we bought the lonely and tired yellow house.
Buying an abandoned house can be an exciting opportunity for the right person, and it also involves several important steps, almost all of which are terrifying. There were things we were prepared for and things we learned along the way. I have put together a list of important takeaways for anyone interested in purchasing an abandoned house or a true fixer upper.
One. Find the proper owner. Once you find an abandoned house, you will need to confirm the ownership details through local property records (search for the deed) as well as search for any liens or back taxes that may be attached to the property. If you’re unsure of the proper steps here, the best thing you can do is find yourself a good buyer’s agent and find a way to fit them into the transaction. Once you identify the proper owner of the property, actually physically finding them and getting in touch can be the hardest part. We identified the owner of the yellow house fairly easily and then it took what felt like ages to get in touch with him, as most of the contact information we found online was either false or outdated. I couldn’t give up. Months or maybe even a year into our search, we ended up finding an email address that had funny spelling and seemed fake. Out of desperation we tried it anyway, and we finally got a response! Then, you just have to hope they are interested in selling and convince them to sell to YOU!
Two. Property inspections are an important part of any real estate sale, even if only for informational purposes. Inspections cost a bit of money (typically somewhere around $500-$1500 depending on where you live and the size of the property). But DO THEM. Not knowing what you’re getting yourself into financially costs a lot more, I promise. I mean, we knew just by looking at our house that the siding needed to be replaced, the windows needed to be replaced, the plumbing and electrical work needed to be replaced, and in addition to that we assumed the worst-case scenario for everything else due to the visible stages of rot both outside and inside of the house. So whenever possible, hire a professional and reputable home inspector look for structural damage, plumbing issues, mold, pests, and other problems that may require significant repairs. We did have one big surprise: The one thing that we didn’t expect to have to replace on our house was the roof. It was a metal roof in fairly good condition, and it hadn’t been installed too long ago. Unfortunately, when we added insulation to the outside of the house before we re-sided, that meant needing to extend the roofline, and the roof that was there was no longer manufactured. So, we had to get a new roof, too.
Three. Calculate the total cost involved (and then double it). This step is not a fun one, but luckily my fiancé is very financially savvy, and is a much better financial planner than I am! Once we found the owner and he said he was looking to sell, we were soooo excited and also TERRIFED. What was this going to cost? If you are exploring a fixer upper opportunity, calculate the total costs involved, including the purchase price, closing costs, cost of insurance, repairs, renovations, and don’t forget to include ongoing maintenance. Reference your inspection reports and call local companies to come give you quotes before you buy the property. Be on site when they are at the property and learn from them. And I’m not kidding, DOUBLE your estimated repair costs to create a buffer for unexpected expenses, because there WILL be unexpected expenses! Make sure the investment aligns with your budget and financial goals.
Four. Secure financing and learn about insurance options and all costs associated. Depending on the condition of the house, traditional lenders might not be able to provide financing, or even traditional insurance options. We found out about the limited insurance options for our home the hard way. Our attached carriage house and barn that both need a lot of TLC raised some concern in this department, which we hadn’t thought of ourselves. Depending on what you are getting yourself into, you might need to explore alternative financing options, possibly an all-cash purchase. As a Realtor, I always recommend starting by talking to the bank that you already have a relationship with to learn about programs they offer and then reaching out to at least two local mortgage lenders to see what they can offer you as well.
Five. If you’ve made it this far and you’re not scared away yet, go make an offer! Once you’ve done your due diligence, make an offer on the property. If the owner is unresponsive or the house is in foreclosure, you may need to negotiate with the bank or local government. Hire a local title company to run a title search and ensure that there are no legal issues that could affect ownership. If everything checks out, proceed to the closing process. This typically involves signing paperwork and transferring funds, ideally at the title company table.
We closed on the yellow house in December of 2023, and one year and two months later, we are still not sure when we will move in. I am really hoping to make that happen this summer, even though it still feels like a stretch! We both work very full-time jobs, so we are only able to be there on the weekends, and we are tired. This is something to consider before buying a house that needs work and you are the one doing the work, too! At the end of the day, I cannot imagine buying any other home. This has been the most rewarding and humbling process, and I can only imagine this sentiment growing when we finally get to move in.
This is amazing! Love the photos and the description of the process!