You want to buy a fixer upper. How much should you pay?

• find out how much it would sell for in prime condition -- real estate agents will know
• deduct your costs to fix it
• deduct a 15 to 25 percent cushion for unexpected repairs
• if it has been on the market for more than 3-5 months (depending on your local market), the seller might be getting antsy.
• if you can offer lower, go for it. You have the advantage, as most buyers want houses that are in "move in" condition. (Unless you are competing with builders who tear down houses -- that's another ballgame!)

Other Tips:

• Try to get to the house early in the game, as soon as it gets on the market. The first offer in often gets the best look from the seller.
• If it's owned by a long time resident, versus an investor, send along a nice letter saying that you really love the house and want to live in that neighborhood. If it's advertised as a handyman special, feel free to talk about how you want to bring the house back to it's original, fine character and style. If the owner is not admitting the house needs work, tread lightly so you don't insult them.
• Have your financing ready, so that your offer can be a quick, easy deal for the seller. Submit an approval letter from your lender so the seller knows you can afford the house.
• Offer to close within 30 days if you can and you think the seller is ready to move.
• Always get a home inspection!!!!!!