Flipped homes are still attracting more shopper attention than other older listings, but their edge has eroded sharply since 2021 as mortgage rates climbed, according to new research from Realtor.com®.
In today’s market, buyers still want move-in-ready renovations; they’re just less willing to finance a big renovation premium at today’s rates.
That shift makes the calculus of buying a house as-is more complicated than ever.
Fixer-uppers may list for about 54% less than the median single-family home nationally, but the discount comes at a steep premium: Because when you buy as-is, you’re also buying every deferred repair, broken system, and outdated finish.
And the resale upside on those repairs isn’t penciling out the way it used to. Renovated homes are now selling at an 8.3% discount from their peak post-renovation listing price, compared with just 0.9% in 2021.
Even in markets where renovations can move a home dramatically up market—what Realtor.com calls a high “flip factor”—buyers are showing more hesitance than they did in the low-rate era.
That doesn’t mean as-is homes are a bad bet. In fact, the lower entry price can be one of the few ways buyers can break into the market. But it does raise the stakes on budgeting. Buyers have to navigate the purchase price, the risk of running out of money after closing, and over-investing in projects they won’t see a return on.
The experts we spoke to recommend budgeting 10% to 20% of the purchase price for upgrades. For older, vacant, or neglected homes, renovation costs can hit 50% or more, with some of the repairs needed before closing to secure financing or insurance.
What repairs will really cost
Not every fixer-upper requires a gut renovation.
Your budget will come down to what’s wrong and how much of the work is truly optional.
When repairs are mostly cosmetic
At the low end, cosmetic issues dominate.
Brett Johnson, a real estate investor and experienced home flipper with New Era Home Buyers, recommends setting aside 10% to 20% of the purchase price for homes that mostly need updates like paint, flooring, or outdated fixtures.
That’s $20,000 to $40,000 on a typical $200,000 fixer-upper.
“Condition tier matters more than age alone,” Johnson adds. Meaning, a well-maintained 1970s house may fall on the lower end, while a newer home with neglected systems might cost more to rehab.
If you’re replacing core systems
Midrange fixer-uppers often need entire systems replaced.
In a recent survey from Hippo, owners of fixer-uppers reported frequent repairs to flooring, ceilings, appliances, plumbing, and windows.
While individual fixes ranged from $274 to $1,600 per project, the volume of repeated repairs throughout the house can quickly compound.
And if a big ticket system needs replacement, you’re likely looking at a bill in the five figures.
Johnson estimates common systems repairs like roof replacements between $10,000 and $18,000, sewer line work at $6,000 to $15,000, and HVAC or electrical upgrades of $5,000 to $12,000, depending on condition and code.
When safety and structure are the problem
At the highest end are homes with major structural risks.
Melanie Musson, an insurance and finance expert at Clearsurance, estimates a full rewiring job at $20,000 or more, especially in older homes where the system hasn’t been updated in decades or more.
She also warns that insurers may refuse to cover homes with unsafe roofs or electrical systems until repairs are made, adding a time imperative that often comes with additional costs.
But the most expensive repair of all is a new foundation.
“Foundation damage will be the single largest expense they could encounter,” says Mitch Coluzzi, an experienced home investor at SoldFast with years of as-is deal experience, citing costs from $30,000 to $80,000.
Musson echoes that risk. “Foundation damage is usually so expensive that it’s not worth fixing,” she says.
“Foundation issues could be caused by the way the earth around the home moves, so that even if you fix the problem, you’re going to have more problems.”
But if you still decide to move forward with a home in need of major structural rehab, Musson recommends budgeting at least 50% of the purchase price for upgrades—likely out of pocket and front-loaded in year one.
That means an apparent $200,000 purchase may quickly become a $300,000 (or greater) investment.
Why ‘as-is’ sales fall apart
If an as-is deal can’t clear the basic hurdles of financing and insurance, your contract will be dead on arrival.
This is especially true for government-backed loans that often come with additional stipulations for home safety and standards.
Coluzzi puts it bluntly: “FHA is going to be super picky with an as-is sale. Oftentimes with as-is, utilities won’t be on, which flags the FHA appraisal as noncompliant.”
He adds, “appraisers may devalue houses with defects and overestimate repairs,” and says that “most of the time, they’ll want repairs made prior to issuing final appraisal given the wide range of quality that can riddle final products.”
Put simply, some “as-is” listings are missing the very things an FHA appraisal is designed to confirm are working.
FHA appraisals generally require core utilities and systems to be operational during the appraisal, including water and electricity, along with a functioning heating system, and the home must meet baseline health and safety standards.
If the utilities can’t be turned on, if the roof is failing, or if there are safety hazards an appraiser can’t ignore, financing can slow down, require repairs before closing, or fall apart entirely.
For some buyers, there is an “escape hatch,” but it’s not a universal fix: renovation loans that roll repair costs into the mortgage.
Fannie Mae’s HomeStyle Renovation and Freddie Mac’s CHOICERenovation are designed to finance a purchase (or refinance) plus qualifying improvements in a single loan, with lender oversight of the renovation plan and draw/inspection requirements that are more involved than a standard mortgage.
But not every lender offers these products and the timeline to closing can be longer, so buyers should treat them as an option to explore early with a lender, not a last-minute solution once a deal is already wobbling.
Who can actually afford to buy as-is?
Buying a home as-is can work, but only for the right kind of buyer.
The best-positioned players are those with enough cash left over after the down payment and closing costs to cover repairs, inspections, and a cushion for surprise expenses.
That’s why many of these homes end up going to investors or home flipping companies: They simply have enough cash on hand to carry any additional costs of bringing the home up to standard.
They also often have access to reliable contractors or can handle some of the work themselves, and bring the luxury of flexible timelines that can handle the uncertainty that comes with renovation.
If you find yourself in a similar position—significant cash reserves, good connections in the home improvement industry, and flexibility—you too may be well positioned to buy a fixer-upper.
But if you’re spending everything to get in the door, an as-is home is likely the wrong bet.
The first urgent repairs—leaks, failed heat, electrical hazards—won’t wait for your next paycheck, and they often can’t be postponed without risking the home’s safety or insurability.