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Buying fixer-upper? Don’t expect goldmine

Several factors can impact ability to recoup investment costs

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Fixer-upper properties come in many varieties. Cosmetic fixers usually offer the biggest return on your investment. And, they tend to be a lot less costly than homes that require major renovation. An ideal cosmetic fixer would be a house that had been somewhat neglected, but that has no serious structural problems. It could be passed over by other buyers because it needs an exterior paint job, new landscaping, new kitchen appliances, floor coverings, updated lighting fixtures and interior paint. In a down market, these houses can be hard to sell if there is a large inventory of new homes in the area being discounted in price in order to sell. In older established resale markets, buyers usually gravitate to the listings that are in the best condition and leave the fixers for someone else. It can be difficult to find a good cosmetic fixer in areas such as the San Francisco Bay Area. There, many listing agents advise sellers to prepare their house for sale in order to sell more ...