Ask an Agent: What to Know Before Buying a Fixer Upper
by Grace Cassidy
April 2025
For homeowners on a tighter budget, buying a fixer upper can be an exciting chance to dust off a hidden gem in a choice location and transform it into a dream home. Of course, buying a home in need of TLC comes with an obligation to invest time and money—often much more than what was initiated budgeted.
Renovations can drag on. Unexpected supply or labor shortages can crop up. And ripping up floorboards tends to reveal unforeseen problems that need urgent fixes.
To understand what buyers should know before they commit to a fixer upper, we spoke to Melissa Principi, an agent for Douglas Elliman in Long Island’s North Fork. Having grown up in a family of contractors and facilitated a number of fixer-upper deals, Principi offered some essential advice, critical caveats, and other points to consider before you commit.
Pro Tip: Get a Pro Team
With homes that need a good amount of work, it’s a great idea to have a number of professionals take a look at the property. It may be impossible to know everything that needs to be done before the walls are torn down, but by having professionals come take a look, buyers can make a more informed decision.
That starts, of course, with the right agent.
According to Realtor’s 2024 Profile of Home Buyers and Sellers, real estate agents are considered “the most useful information source in the home search process.” However, the same report showed that most buyers only interviewed one agent before making their decision.
When you’re looking to purchase a home that will need extensive renovations before moving in, it’s a good idea to go with an agent who has experience facilitating deals with homes that look like the one you’re about to buy—and where it’s located.
“Work with a broker who’s familiar with the area,” Principi suggests. “They can help get you to the right people.”
Principi, for instance, may invite an architect to come with her to an open house for a fixer upper. And because she’s both worked on fixer uppers herself and facilitated these kinds of sales, she has local connections that come in handy for her buyers, from tradespeople to municipal workers who can help inform buyers on what they can and cannot do with their future property.
“You need your team,” she advises. “People who can guide you.”
This also means that the timeline for putting an offer on a fixer upper is often considerably longer than it is for a move-in-ready home, which typically receives numerous offers after its very first open house.
“Buyers should go in knowing that they’re going to have to get trades in before contracts are signed,” she adds. “People ask if they can bring a builder or architect, so there are usually more visits to the home before anyone signs anything.”
Look before you leap
While every home is different, fixer uppers tend to range dramatic from property to property. A buyer may attend an open house for an immaculately maintained century home in the morning and then go on to see a dilapidated house with an illegal basement in the afternoon. This unpredictability is part of the reason why it’s so important to have a team of knowledgeable people who can help you along the way.
“My family is in construction—we love the really challenging ones,” Principi laughs. “My sister is an architect, and dad is a coastal contractor. We look at things other people would run the other way from. We’re not afraid of them.”
“I think the most common mistake buyers make with these kinds of properties is getting in over their head,” Principi says. “They might think an issue is just cosmetic, when it’s something much bigger.”
And if your fixer upper is located far away from your current residence, that distance can compound the headaches.
“If second-home owners or landlords aren’t fully involved in the first six months of getting the home together, it’ll cost them more in the long run,” she warns. “You’re not there babysitting, but you’re hiring people.”
For this reason, people who aren’t local to the area where they purchased their fixer upper might want to consider hiring a trusted property manager for the period of time it takes to renovate the property.
Explore construction financing
Unless you’re planning on funding the renovation with cash you have on hand, buyers in search of a fixer upper can consider a loan that allows them to borrow for both the home price and the cost of renovations.
There are a number of loans that allow homebuyers to take out money for renovations, including the Fannie Mae HomeStyle renovation loan, the FHA 203(k) loan, and renovation loans for qualified buyers from the Department of Veterans Affairs and U.S. Department of Agriculture.
Principi recounted working with a client to secure a what is known as a construction-to-permanent loan.
“It’s basically a special construction loan for regular people,” she says. “With that, we were able to up her budget: She was approved for $500,000, but she got $600,000 from her bank. The extra $100,000 was for the renovations.”
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