1. Archive

This "fixer-upper' was a real disaster

Question: I wish you would quit advising home buyers to purchase "fixer-upper homes." That's what we did almost a year ago. We got a tremendous bargain because the house was in such bad condition. But we have plowed almost $15,000 into the house since then and it hardly looks any better than the day we bought this "as is" probate property. The first thing that went wrong was the roof began to leak. Almost $4,000 later we had a new roof. Then the sewer line plugged up and had to be replaced. We also have spent several thousand dollars upgrading the plumbing and the wiring. We haven't even begun to tackle the kitchen, bathrooms, carpets and everything else which needs repairs. Why don't you warn home buyers? Marlys H. Answer: Unfortunately, you made a costly mistake by not having the house professionally inspected before purchasing it. I recommend buying fixer-upper houses with "the right things wrong" such as those needing paint, carpets, landscaping, repairs and cleaning. But I advise staying away from houses needing major unprofitable work.

A professional inspector would have found most of the defects that you listed. Those are unprofitable repairs that are necessary, but they don't increase the property's value.

When buying a fixer-upper house, my goal is to increase the market value by at least $2 for each $1 spent on improvements. If a house needs so much work that it won't be profitable to fix it up, then it is best not to buy.

Title insurance

Question: We are buying a vacation home near a small town where real estate sales are handled by the one and only lawyer. He says he has checked the seller's title and everything is fine. We trust the lawyer and the seller, but we don't feel comfortable about receiving a quit claim deed. _ Charles W.

Answer: Never, never, never acquire any real estate without also obtaining an owner's title insurance policy. There are so many title risks, such as a forged signature in the chain of title, it is foolish not to insist. Tell the lawyer you want that quit claim deed insured with an owner's title insurance policy. If the attorney can't arrange it, consult a title insurance company in the nearest city.

Robert J. Bruss is a nationally syndicated columnist on real estate.