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There’s lots of lingo to decipher when it comes to real estate, but the phrase “turnkey home” is almost as simple as it sounds. Just turn the key and walk into your move-in ready home!
Sure, there’s a little more to it than that, but with the help of Carl Medford, a top Fremont, California-based real estate agent with over two decades of experience, we’re digging into the nuances of turnkey homes — along with all the lovely potential they hold for you as a buyer.
What is a turnkey home?
Generally speaking, a turnkey home is a house that is ready for you to move into as soon as you buy it. A turnkey home needs no further repairs or renovations — everything is in proper working condition and aligns with current aesthetic standards.
“For us, a turnkey home is a property where our team has gone in and taken care of all of the fundamental issues, then made the necessary upgrades to ensure the home is up to current standards,” explains Medford. “We make sure it’s visually appealing and resonates with buyer tastes, so all they have to do is move in, unpack, and start living their lives.”
See? Nice and simple!
Why buy a turnkey home?
There are several advantages to buying a property that is move-in ready. A turnkey home may especially appeal to you as a buyer if:
- You don’t want to fuss with making repairs.
- You’re not interested in taking on a renovation project.
- You’re on a tight budget.
- You need to get settled in right away.
- You’re not planning to stay in the home long-term.
- You’re an investor looking for a move-in ready rental property.
According to Medford, most of his buyer clients are looking for turnkey homes due to busy lifestyles or a limited skillset for making home repairs on their own.
“People really want turnkey, move-in ready homes, and they’re willing to pay a premium to get them,” he says.
Pros of buying a turnkey home
There are real advantages to buying a turnkey home, including:
- Your newly purchased home will be ready to move into from day one.
- There won’t be an urgent need for repairs.
- Renovations will be purely optional and subject to your own preferences.
- You’ll be able to settle in more quickly.
- You won’t have to worry about permits or code requirements that come with some home improvement projects.
- You won’t have to navigate a schedule of tradespeople or other workers coming in and out of your new home.
- There’s a lower risk of financial surprises after you’ve signed on the dotted line.
Cons of buying a turnkey home
All this being said, buying a move-in ready house isn’t for everyone. Downsides may include:
- A higher purchase price.
- Location options may be limited.
- Less opportunity for personalization of new features and functions.
- A feeling of “take it or leave it” when the idea of re-renovating a newly renovated home seems wasteful.
- Wondering if repairs were made correctly, or if the fresh paint and flooring may be disguising larger issues.
Medford cautions that he has “seen some pretty shoddy work over the years” when it comes to home upgrades, both in terms of quality of workmanship and aesthetic choice.
“Sometimes we’ll see — let’s just say ‘tacky’ — upgrades,” says Medford. “There are paint jobs, and then there are ‘paint jobs,’ you know?”
Should I buy a turnkey home?
You should definitely consider a turnkey home if convenience is your priority — and if you have the budget to compete at the top of the market.
“There are three tiers of homes in any market,” says Medford. “You’ve got the bottom tier, which are the total fixer-uppers. Then you’ve got the middle tier, which are usually aged homes that maybe haven’t been well-maintained over the years — they’re not fixers, but they’re what we’d call dead average, with no upgrades. And then you’ve got the top of the market, which are the gorgeous, renovated homes with a new kitchen, new bathrooms, and so on.”
Medford says he’s been watching the middle tier of homes slowly disappearing throughout recent years, citing buying trends that mean people either want a fixer-upper that they can fully redo themselves, or they want a turnkey home they can move right into.
“There just aren’t a lot of buyers for that middle segment of homes,” Medford explains. “Buyers don’t like buying ordinary, mediocre homes. Given the opportunity, they’re going to pay more for a fully upgraded turnkey home.”
How to find a turnkey house
Working with someone who knows your local market inside and out will prove invaluable when it comes to finding — and negotiating for — your perfect home. A seasoned agent can help you determine your wants and needs, educate you on market conditions, show you what’s available, and together help you determine which home will be the best fit for your budget and lifestyle.
What to look for in a turnkey home
Your agent will be able to help you discern a true turnkey home from one that has had little more than a thorough cleaning and fresh coat of paint, but there are a few key indicators you can look out for on your own.
9 Positive signs it’s a solid turnkey house
- Plumbing and electrical systems are modern and updated to current standards.
- Appliances are new and energy efficient.
- The foundation is free from cracks and other signs of damage.
- The HVAC system is new or otherwise modern and well-maintained.
- Fixtures and furnishings are upgraded.
- The exterior of the home is visually appealing and free from damage.
- The roof is in excellent condition.
- Any storage spaces (like a basement or attic) are free from water stains and pest infestations.
- Flooring is clean, level, and either new or properly restored.
9 Red flags in a so-called turnkey house
- Fresh paint appears to be hiding decaying cabinets, cracked trim, or wall damage.
- Moulding is damaged or unaligned.
- Flooring is uneven or unmatched.
- Countertops don’t line up.
- Windows or doors don’t open and close properly.
- Signs of water damage or mold are present.
- The roof is missing shingles or is otherwise visually damaged.
- There are stains on the ceiling.
- Plumbing and/or electrical systems appear dated.
How can I protect against buying a faulty turnkey house?
Whether you’re looking for a turnkey home or not, it’s important to always have a thorough home inspection carried out before you commit to a property. Even if a house looks fantastic, and even if the seller can provide a stack of receipts for recent repairs and upgrades, a proper inspection can save untold amounts of money if the report reveals a not-so-obvious problem.
“A primary inspection in our area costs approximately $1,100,” says Medford. “I always tell my buyers to think of it as an insurance policy. You’re paying a small amount of money to make sure you don’t make a large mistake.”
In addition to the home inspection, you can further safeguard your buying process with:
- Additional specialized inspections, such as a pest, HVAC, roof, or mold inspection for added peace of mind.
- An appraisal contingency, which will give you an out if the home doesn’t appraise at or higher than your offered sales price.
- A home warranty — also known as home repair insurance — to offer assistance in the event of emergency expenses related to malfunctioning home systems or appliances.
- Advice from your real estate agent, who may have further insights about a particular neighborhood or common mishap with homes in your area.
Is a turnkey home actually worth it?
Turnkey homes are absolutely worth it when you want the ease and convenience of buying a home that is fully ready to move into as soon as you take the keys. You’ll need a larger budget in order to buy, but you’ll likely save money in the long run since you won’t have to worry about repairs or upgrades anytime soon.
But if you have big dreams of carrying out a total renovation on your own home, then a turnkey property probably isn’t for you. You’ll be paying more for a house that is already repaired and upgraded — so save the cash and buy a fixer-upper that’ll give you full flexibility to customize it to your heart’s content.
And remember, working with a great agent is your best bet for finding the perfect home for you — turnkey or not.
Header Image Source: (Étienne Beauregard-Riverin / Unsplash)