If your clients don’t thrive on the competition of a bidding war, or enjoy paying thousands over budget, then the current real estate market probably has them in fits. 

Lucky for them, they have you in their corner. You’re the voice of reason. You’re their advocate. You’re the one who’s going to help provide creative solutions that will get them into a home they love.  

If you have clients who are frustrated about their search for a new home that’s move-in ready, join the club. Real estate agents nationwide are fighting the same battle. But there are ways you can help them overcome these issues and still end up with a house they are thrilled with.  

One common solution gaining momentum is purchasing a cheaper home that needs some renovation. They’d call it a fixer-upper, but let’s call it their pre-dream home. And, for some of your clients, it might be the game-changer they’re looking for. 

Discouraged by the difficult housing market, both first-time and experienced buyers are considering the solution to get into a nice home in the short term while fixing up a home that will be a solid investment for the long term. 

According to data from Realtor.com, in 2021, homes in need of renovation sold faster than in the two prior years. Fixer-upper sales vaulted 13.4 percent from 2020 to 2021, while the dollar volume of those deals surged 40.8 percent from 2019 to 2021. Also, agents’ listings described as “fixer-upper” or related terms increased by 8 percent in December 2021 from the previous year. 

While buying a fixer-upper may seem like a great option, there are things your clients should consider before moving forward too quickly. They should understand some of the pros and cons so they’ll know what they are getting themselves into. Below are some questions your clients should ask themselves to find out if a fixer-upper is right for them. 

How much time can you invest? 

Home renovations can be fun. They are also a great way to ensure that your clients end up with a house that’s tailored to their needs, style, and budget.  

Spending the time choosing new flooring, countertops, or taking on other more intense remodeling projects may be worth it when they can look back at the finished product and know that they were able to transform a home someone else lived in into something that aligns with their own vision. 

Hiring a professional can help move the projects along faster and ensure that things are done right, but it still takes time. Before your client commits to a fixer-upper, they need to decide if renovating a home is worth the time it could take – even if it takes longer than they think. 

What is your total budget, including repair and renovation? 

If they have the time and budget, renovating a home may result in your client’s dream home – with much less expense. They may find it very satisfying to know that their ideas came to life. Especially if they were able to complete the remodel with a reasonable amount of cost savings. It may take some shopping around to make that happen, but it’s not impossible. 

But they need to know that home renovations can be costly. One way to avoid under-budgeting for renovations is to apply for a loan that covers the home and the cost of renovations, known as a renovation loan.  

What types of financing should you consider? 

Unless your client has deep pockets, they will need to finance at least some of the renovations. They should start thinking about a plan – like a home renovation loan – sooner rather than later.  

Your clients may not have even heard of these types or mortgage loans. As an experienced real estate agent, you should be able to at least educate them on this loan option and refer them to a lender who can help them with the details. 

A couple home renovation loan options include:  

  • Fannie Mae HomeStyle® Renovation – Fannie Mae allows borrowers to combine a mortgage with a loan for renovations. They can use this mortgage to cover 105 percent of the mortgage and renovation projects.  
  • Federal Housing Administration (FHA) 203(K) Loan – The federal government insures these loans, which makes them less risky for lenders and easier to get for homebuyers. There are two options: Limited and Standard. The Limited 203(K) offers up to $35,000 for renovations. The standard 203(K) may offer enough for more extensive structural repairs. 

Where will you live until the house is ready? 

If their new home is being renovated, where will your client live in the meantime?  

Sometimes, families can live in the part of the home that’s not being remodeled. That could mean hunkering down in the basement for a few weeks.  

If staying in the home during renovation isn’t possible, there may be some other workable options. If they have family or close friends near their new home, they could temporarily stay there for free or for a small fee.  

Otherwise, they will need to account for the added expense of staying in a hotel, furnished sublet, Airbnb, extended-stay hotel, or somewhere similar. They also need to think about where their belongings will be stored if it’s not possible to move them into the home right away. 

No matter which temporary option they choose, the inconvenience could be worth it in the long term once they move into their newly renovated home. 

If you have clients who are considering a fixer-upper for whatever reason, you can help by making sure they consider the pros and cons associated with these questions before jumping too deep into the process. If they have questions about the financing piece of the puzzle, you can always send them our way.


Bloomberg. (n.d.). Bloomberg.com. Retrieved April 8, 2022, from https://www.bloomberg.com/news/features/2022-02-11/should-i-buy-a-fixer-upper-hgtv-hot-markets-have-buyers-picking-risker-homes