What is a potential fixer upper worth? The million-dollar question. To begin with you have to calculate the value of the house after it’s all fixed up and ready to sell or what the market value will be at sale time. In a depressed market this can be difficult. You don’t have the safety cushion of a rising market to offset unplanned expenses.

Do some detective work and find out what houses are selling for in the neighborhood by the square foot. An appraisal service can help out with this…speaking of appraisals…get a good appraisal from a qualified appraiser that will give you an accurate figure. Be sure to inform him of your intentions. Many times appraisals are inflated for the second mortgage industry. This has gotten a lot of people in trouble by owing more money than a house could ever be worth.

Along with that appraiser you need to find a good home inspection service and be sure the contract includes an inspection clause…. this will allow you to back out if the needed repairs become excessive.

Be there when the house is inspected and ask questions. You have to find a willing inspector that will allow this, because I know from experience it is very annoying to the inspector having to explain everything little thing to a tag-a-long buyer…. and it’s really fun when you have both buyer and seller following you. I’ve seen a few near fistfights and the inspector often becomes a referee. Therefore, some inspectors will not allow tag-a-longs.

Learn to be your own inspector…because usually an inspector can only report things that he can actually see and homeowners and real estate people are notorious for covering up things with shoddy temporary repairs.

All in all the buyer has few friends. Certainly not real estate people because they are after the commission and many times home inspectors rely on real estate people to get work…so, the inspector may be in the real estate agents pocket…so to speak. The buyer must be aware of potential good old boy setups.

After you have determined a viable potential selling price, determine what repairs will cost. Get estimates for repairs if possible and include all materials and labor including what you intend to do yourself. Don’t short change this estimate and add about 15 percent to it for unexpected problems.

Structural repairs add little if any value to a house because you are merely returning the house to its former structural integrity and not adding improvements that might increase its value. Most real estate investors will not touch a house that needs major structural repairs.