When potential buyers are looking for a home, there are two main categories of homes: turn-key and fixer-upper.
A turn-key home means you can unlock the door and move right in with no work needed. And a fixer-upper is a home that needs some work, which is appealing to some because the purchase price is usually considerably lower.
If there are sub-categories to the turn-key homes, one of them would be rehabilitated (“rehabbed”) homes. These are former fixer-uppers that were purchased by a house flipper, fixed up, and re-sold as turn-key. There are pros and cons to purchasing a rehabbed home, and homebuyers should be aware of the big ones.
Pro: The home should be truly turn-key
Most rehabbers acquire homes that are a disaster. Frequently, a flipped home is gutted and re-fitted with all new materials, including flooring, cabinetry, plumbing fixtures, lights, countertops, and more. When you buy a rehabbed home, it can be very much like purchasing new construction in that most everything should be new.
Con: You don’t get to customize
You probably wouldn’t buy a home if you didn’t like, say, the kitchen cabinets or countertops. But if you don’t love them, you’d likely be hesitant to replace big things that are brand new. So while everything is new and fresh, unlike new construction, you don’t get to pick anything out. Someone else has picked it out for you.
Pro: Someone else did all the work
If you’re not handy, this is a good thing. You’re not paying what it costs to build a brand-new home, and you’re still getting a lot of newness in the home without having to lift a finger.
Con: You paid for all the work
The downside of any truly turn-key home is that somebody is getting paid for doing the work to make it turn-key. When you buy a home from a rehabber, the rehabber is making money for the work that’s been put into the home; it’s built into the purchase price. The buyer is basically paying for a rehab project instead of taking on any work themselves.
Pro: Everything is new
There’s something to be said for moving into a home with appliances that haven’t been used, floors that have rarely been walked on and faucets that have never been turned on. You get new cabinetry and counters in the kitchen, brand new toilets in the bathrooms, and nice new flooring throughout the home.
Con: It might not be high-quality
Real-life flippers are not the ones you see on the TV shows, where no expense is spared, and every flipped home gets high-end finishes. The reality is that flippers attempt to squeeze every dollar out of a rehabbed home. And that means looking for bargains wherever they can. Looking good can take priority over being good. So in a rehabbed home, you want to carefully examine the quality of the cabinets, flooring, light fixtures, etc.
Rarely do homebuyers find a truly perfect home. Even after building a brand new custom home, buyers tend to find things they’d do differently once they’ve lived in a home for a while. But if you’re looking to get a mostly new home, without paying the premium of new construction, a rehabbed home can be a solution. You just have to know what you may and may not be getting.
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