If you’re home shopping on a budget, you’ve probably come across the terms “fixer upper” and “TLC.” Is it the type of home you are looking for? Let’s find out.
Most people know “TLC” is an abbreviation that stands for “tender loving care”, but what does TLC mean for a house? If you see TLC under a listing’s description, then it means that the home needs extensive work and remodeling. Essentially, it is a rehab home and the price of the home can also reflect the condition it is in.
Selling a home as is may not seem like a great draw for those home hunting so why do people put TLC houses for sale? This may be because the current owners aren’t able to put time and money into repairs. While the home may be maintained, if the owners haven’t upgraded the outdated design, features, and appliances, using the term TLC gives buyers a heads up that the home isn’t perfect and needs some work.
Keep in mind that sometimes the term “TLC” can mean various states of needed changes and its definition can be dependent on perspective. While some can mean a teardown home that requires a lot of work, it can also mean simple cosmetic changes like new paint and flooring, or upgrades to modernize the space such as changing kitchen cabinets and lighting fixtures.
To understand how much work a TLC home needs, it is important to take a look at listing photos and take note of the price of the space as it will reflect its condition.
Pros and Cons of TLC homes
It can be difficult to determine if a TLC home is the way to go for you and your family. Especially if the home needs a lot of work done, it can be hard to tell if it will be worth it in the long run. Here are some pros and cons of purchasing a TLC home so you can make an informed decision for your lifestyle and budget.
- Finding the perfect home is difficult to come by. With a TLC home, you have more creative leeway to design the home exactly how you want it.
- Remodeling the home gives you the opportunity to make the home’s worth increase a lot more than you initially paid for it.
- TLC and fixer upper homes are typically 8% below market value.
- You’ll pay less in property taxes because it is based on your home’s sale price.
- You can decide which areas of the home you want to put more focus and spend more money on.
- Most TLC homes aren’t move-in ready.
- It can take months, even years, before the TLC home is finished
- Renovations and remodeling the home can be costly.
- It can be difficult to determine the exact total cost of everything, which means there is no set financial cost of the entire renovation beforehand.
- If you need to make structural changes to your TLC home, it requires purchasing a building permit, which is another expense.
TLC vs. fixer upper
The terms “TLC” and “fixer upper” meaning can be a bit confusing especially when they can sometimes be used interchangeably. Keep in mind that these terms can be used to describe various states of a home depending on the perspective of the realtor and seller. So what is the general difference between the two terms when it comes to real estate?
A fixer upper is usually referred to as a home that is structurally sound and only needs a few cosmetic changes. This includes things like new paint, new carpeting or hardwood floors, updated kitchen cabinets, and new lighting fixtures. Essentially, a fixer upper is a property that can be easily done by yourself and the cosmetic changes can increase the value of your home. You are also able to live in the house while you are fixing it up.
A TLC home is usually also known as a rehab project or a teardown home. This means it’s a home that needs a lot of work that can include things like changing the structure of the house, replacing the room, repairing any type of damages, and replacing electrical components. Usually with a TLC home, you won’t be able to live in the home while work is being done to it. Compared to a fixer upper home, it requires a lot more commitment and investment in time and money.
Tips on making an offer on a TLC home
If you’re interested in committing to a TLC home, what to know when you buy a house? Approaching normal houses for sale is one thing, but how should you approach a TLC home. Here are a few tips on how to evaluate the price of a TLC home and things to keep in mind before making an offer.
1. Figure out the value of the house if it were in perfect condition
Houses in need of TLC are usually listed at a discounted price. To be able to see how much the home would be worth after it is renovated, take a look at the homes in the neighborhood and surrounding area. Research similar homes in the area to see how much they were sold for.
It is important to take a look at those that wouldn’t be classified as needing any TLC. Localize is a great resource for this because our insights include historical prices of nearby properties. With this, you can easily see how much homes near the listing were sold for.
2. Home inspection
Before you purchase a property, a home inspection is essential. While you may have fallen in love with a home’s potential, there may be issues with the house that you aren’t able to see just by looking. It is important to get a home inspection so you know exactly what condition the house is in and how much work and repairs are needed.
Ignoring the warning red flags of a property and skipping the home inspection can lead to increasing issues in the future, which can take more out of your wallet than expected.
3. Estimate the cost of necessary repairs
After knowing the exact condition a property is in, then you need to estimate the cost of repairs. You can easily do this online through websites like HomeAdvisor and Thumbtack. These websites can help you determine cost estimates depending on the various home improvement projects you need.
Knowing the cost of repairs is an important step in budgeting your finances and determining how much you are able to offer on a home.
4. Figure out the cap budget for the home
Once you’ve figured out the estimated cost of necessary repairs on a home, you can then determine the budget you can offer on a particular home. You can do this by subtracting the estimated cost of repairs from the home value if it was in perfect condition.
For example, if homes in the area are going for around $500,000 and your estimated cost for repairs are $30,000, then you can cap your budget for the house at $470,000. If you’re still unsure about how much you should offer for the home, talk to your realtor or broker and they can help you figure out how much you can afford and what is a fair price to offer.
5. How much TLC are you willing to give the home
It’s not surprising that most TLC homes require a lot of work. However, the amount of work can range from simple cosmetic upgrades to more intensive gut jobs. It is important that you determine how much work, time, money, and energy you’re willing to put into a home. This can help you determine what kind of TLC home condition you’re looking for.
Now that you know exactly what a TLC home is and what it has to offer, is a TLC home for you? If you’re looking to find a new home, whether it be a move-in ready space or a fixer upper, Localize has plenty of listings that may catch your eye. Our insights can help you find the perfect home in a neighborhood that best fits your needs and lifestyle.