Home Buying in 60062>Question Details

chiame.ellie, Home Buyer in Deerfield, IL

Buy the least expensive home in the area and do a complete gut rehab OR buy with the high mortgage and only fix cosmetics?

Asked by chiame.ellie, Deerfield, IL Sun Dec 23, 2012

Hello - Our current apartment lease ends in July 2013. I am so sick of renting, so my husband and I are planning to buy our first home. We have been married for only a year, and we have no kids. He works in DesPlaines, and I work in Deerfield. Somewhere in the middle is the Glenview/Northbrook area that we both like. We thought that it is best to start looking now as opposed to waiting until the last minute. We were pre-approved for $300k, but none of the houses that we see in this price range is anything that we like. We were thinking that our next option is to purchase the least expensive house in the area, and have it custom-made the way we want it. We're not sure of this strategy as we have absolutely zero knowledge in the real estate area. Does anyone have any advice?

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12
Hi, If you are secure in you jobs, it makes total sense to purchase something. In this market, you can get much more house for the money than you could a few years ago. I always recommend to my clients that they do not purchase at the high end of their budget--you certainly don't want to be house poor. Your main consideration should be finding a location you love; with effort, any house can be turned into a "dream home", but the location can't be changed. I don't think it's necessary to find the cheapest house, but just one well with-in your budget that will allow you the extra cash flow to make it into exactly what you want!
0 votes Thank Flag Link Thu Nov 14, 2013
Hi Chiame, I always recommend- especially to my first time buyers- to buy low, especially if you are planning to stay there a while. As a newly married couple, you'll want to have reserves for your growing family. My advice is: Buy a house in a location you love, because the patch of grass that holds your home is permanent! Then, spend the first months together blissfully dreaming and planning your specific wants and needs, and start to put them in to action. Although you may not have the sleekest house on the block in the beginning, by the time you are finished, you will both be living in the EXACT space you want. How cool is that?! And the best part is that you planned it together, you worked on it together, and house becomes your home, built from everything that both of you enjoy and appreciate. By remodeling, you'll also be the "heroes of your neighborhood", because you'll increase everyone's home value around you! Plus, purchasing a less expensive home probably means it's an older home, which can carry it's own set of benefits such as: more character, an established neighborhood, old world construction, and perhaps a larger yard. All in all, nothing beats putting your own stamp on something, and it's well worth the wait to surround yourself with exactly what you want. I hope this helps and good luck to you!
0 votes Thank Flag Link Thu Nov 14, 2013
Hi There,
Did you ever find a home that met your needs in that price range? Many people look to purchase as much as they can while interest rates are at record lows. They look at it as being able to get what they want now, and spread the cost over 30 years. If there is a specific neighborhood that interests you, then finding a home in that neighborhood and growing with it and sprucing it up may be your option. I live and work in Glenview, and can always try to help find something that meets your needs if you haven't yet found a home to call your castle.


Paul Cionczyk| Coldwell Banker Residential Brokerage |Broker
312-433-9931 | PaulCionczyk.Broker@gmail.com |PaulCionczyk.com
Web Reference: http://www.paulcionczyk.com
0 votes Thank Flag Link Wed Apr 3, 2013
The answer is to decide on what you think your long term plan/goal is. If you haves budget of $ 300k, you might find everything you are looking for. So buy a home that you like, but might not be your first choice and then slowly fix it up as you can afford it. If you want to walk into a completely done house in the area, it most likely will be a condo or small town home. But you never know until you start looking!
0 votes Thank Flag Link Thu Jan 24, 2013
Chiame,
I have been at this for a long time.
I like the idea of purchasing a home and fixing it up the way I like it.
This is one of my areas of expertise.

An example.
I purchased a ranch home that had a tiny master bathroom and a small closet.
It had a finished basement, but it was very dated with paneling and small ceiling tiles.

I was able to move a wall which allowed me to add a few feet to the closet and master bath which tripled the size of both of them.
It also had some beams and a half wall that we took down.
You wont believe all the trash we accumulated.

Also I took a closet that was facing out and turned it around, but used part of it for a shadowbox.

I put in sliding doors where there were just windows.
It was pretty cool. Here are some photos so you can see for yourself.

https://plus.google.com/photos/101682649942366957607/albums/…

I love helping my clients come up with creative ways to enhance the value of the homes they are buying.
0 votes Thank Flag Link Sun Dec 23, 2012
Have you seen any "least expensive houses in the area" that you like?

In my experience, the cheapest houses are also functionally obsolete - the floor plans don't work, and there's not enough there that's worth saving. To invest money in a structure like this is to throw money away, maybe unless you are an investor planning to rent it out.

It is quite likely that you cannot afford a house you like in a location that you like. Before you decide that, ask your Realtor® to search the database and see if there are recent sales in your area and price range that you would have liked to at least look at, and ask their opinion on whether your expectations are reasonable.

All the best,
0 votes Thank Flag Link Sun Dec 23, 2012
There are several benefits to buying a home with dated finishes, relative value is among them. You'll get to choose exactly what style and quality of finish you want, when you do remodel. When you gut the home, you'll know what corners are cut, if any. I.E. will you save a little money by using thinwall (red) copper plumbing vs. the thicker (blue) copper. Will you insulate the water lines? Hot and cold?
As both a real estate broker and a LEED accredited green builder, I assist clients with both the acquisition of assets as well as their major modernization. I have assisted clients with both approaches. In the end, buying finished vs getting a fixer-upper is about several factors.
1-Can you afford the finished home, with the amenities you want, in the location you want?
2-If not, which of your priorities will you flex; finish, amenities, or location?
3-If you intend to remodel the home you're buying, will you do it before your move or live through the mess.
I would be happy to answer any further questions.
Ashur 'Osh' Nissan
Broker / Realtor
Weichert, Realtors - Lakeshore Partners
847-644-9177
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Ashur - Thanks for your reply.

1. Won't the finished home be paid through the monthly mortgage?
2. If not, the best answer would probably be location because of our jobs.
3. We prefer to have the house ready when our lease ends on July 2013.
Flag Sun Dec 23, 2012
Buying a home to fix-up is an option that you may want to consider as long as it has the features you want. There are some lender programs that allow you to borrow to fix-up the home. However, buying the least expensive home in an area should only be considered if it has the features you are looking for and "fits in" to the neighborhood. A good example of that is a home has one bathroom and no space to add another bath without a great expense while the rest of the area you are comparing has two or more baths. Buying a home that just needs cosmetic improvements that can be done over time is an easier option for most people.
0 votes Thank Flag Link Sun Dec 23, 2012
Chiame, the best approach may be based upon your available funds. If you buy the least expensive home in the area and plan to rehab that house to suit your specifications, that would be a great option providing you have additional monies or sources to obtain the money you'll need for a rehab. There are some financing options that may work for this approach and you may want to discuss that with the lender who has provided your pre-approval.

Alternately, if you choose the route of waiting for something you like to come on the market, of course there is the possibility that nothing will satisfy your desires at your price point or if you are not receiving daily updates directly from the MLS, you could miss something. Make sure your Realtor has set that up for you or select an agent who can help to assure that you are getting consistent up-to-date information. Best of luck. Let me know if I can help! Happy Holidays.
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Ellie,

Unfortunately you get less for your money on the North Shore. I would recommend Buffalo Grove. It's not far from Des Plaines and you will get a lot more house for the money. You are smart to start the process now so you can get a feel for what's out there and what home prices are. That way you'll know a deal when you see one. I would be glad to set up search for you sending you homes in your price range within 20-30min driving time to Des Plaines or Deerfield. I'm happy to answer any questions you have about the home buying process and when you are ready say April/May we can view the homes you like.

What criteria are you looking for? Feel free to be specific, as my search can narrow down square footage, lot size, school district, taxes, basement or no basement etc.

Kathy Diegel
Coldwell Banker Residential
The Peggy Cobrin Team
Call or Text 847-707-8907
Kathy.Diegel@cbexchange.com
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Kathy - Thanks for your reply.

I've driven up and down Lake-Cook Road to pass through Buffalo Grove, and, frankly, the style of the houses was not what we were looking for. We would like a 'Cape Cod' style house. Was there a specific area in Buffalo Grove that we should have looked into?
Flag Sun Dec 23, 2012
It could not hurt to find a Realtor there to speak with and and questions to. They will be free to you since the sellers pay us, so find one that is experienced and knowledgeable and ask them. They should be able to help answer questions as well as find homes for you to see.
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Tim - Thanks for your reply.

As to your statement that Realtors' services are for free, when do they start charging us?
Flag Sun Dec 23, 2012
Generally speaking you will find better value in making your own improvements. However, the process of making major improvements can be stressful.
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Evan - Thanks for your response.

We were warned that the gut rehab option would be very stressful. However, we figure that it will be worth it since it will be the home that we want. And, after all the moves that we did for the last few years (with all the job changes and job re-locations), we are both committed to settling in this area, and having this as our last move ever. Plus, we were thinking that all the construction can be done while we are still at the apartment, so there are no interruptions from us (will an Architect or Realtor take care to make sure the construction project is on time/on budget?)
Flag Sun Dec 23, 2012
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