Why That Fixer-Upper Might Not Be the Right Purchase for You

Old HouseIt’s natural to want a deal and what better deals are out there than fixer-uppers? But does this home purchase make sense for you? Here are some things to consider ahead of time.

Portrait of Commercial Painter
I’m handy but not a professional. If you are good with a paint brush and a hammer but don’t know the difference between a GFCI outlet and a voltage meter, you probably should carefully evaluate the skills needed to make that fixer-upper habitable. If it’s just cosmetic, then it should be as easy as inviting some friends over for a paint party and perhaps installing new carpeting or cleaning. But if the repairs required are significant and involve drywall, electrical, plumbing, roofing, or the like, you should be prepared to shell out some big bucks for a professional to complete the project. Know your limitations or you are liable to get stuck with an eye sore that no one wants to visit.

Typing with Pencil on Calculator

• Is it in such disrepair that you won’t be able to get mortgage financing? These days, your options for rehab properties are all cash or perhaps a 203K FHA loan. A 203K loan allows you to get bids for repairs required and submit them to the lender for approval. The obvious advantage is that you can borrow the money for the purchase and the repairs in one loan at competitive rates. However, these types of loans aren’t usually attractive to the seller of a distressed property as the loans normally take longer to close and there will be requirements associated with the underwriting of the loan that make it less desirable.

Pandora's Box
• Unless you know specifics about the property, you may be opening Pandora’s Box. Many foreclosure or distress properties that are being sold as a “deal” are also being sold “as-is”. What does this mean? Normally, it means that any information you find from a home inspection is for informational purposes only and the seller will make NO repairs whatsoever. Those auction homes that are sold to the highest bidder usually allow for a short period of time prior to the auction where the property can be inspected and reviewed thoroughly before making an offer. But no matter how thorough the inspection, you just don’t normally know who lived in the home or how it was maintained previously – if at all. A termite inspection is just the starting point. Finding out as much about the property as possible will help you in determining how extensive the repairs are likely to be.

• Know the neighborhood before you buy! It’s all well and good to get a great price on a home but if the distressed home is also in a distressed or high crime area, are you really making an investment in something you can either enjoy or make a profit on down the road? This is completely subjective and depends on your needs and wants but do your homework about the area because making that home a showplace when no one else in the community is doing the same, will likely cut the return on your investment substantially and no amount of “fixing up” will really make it a profitable investment.

If you think you can tackle a fixer upper on your own, then remember to know how you’re going to finance it, know the condition of the home, and know the neighborhood before you jump in!

Irene Morales Ward, Realtor

Because Choosing the Right Realtor DOES Matter!

Because Choosing the Right Realtor DOES Matter!

About Quantico Homes

Working primarily as a referral agent, my main motivation is to be able to provide you the highest possible level of service as you look to buy or sell your home in the Northern Virginia Real Estate market. You should be so impressed with your service that you will feel compelled to refer me to your family, friends and colleagues. Our time together is always well spent meeting your specific needs because my time and effort is not spent looking endlessly to generate more business. As a Buyer's Agent, the buyer's criteria becomes paramount during the home buying process. Your needs will never be compromised because Dual Agency is not something I participate in. This is a distinguishing characteristic from many in the industry and I stand firm in the belief that no client in a transaction (whether a buyer or a seller) should be without 100% representation. You deserve all the loyalty and attention from an agent who will always have only your best interests in mind. Keeping in mind that Northern Virginia is a highly transient area, I am always privvy to sales reports and market analysis of all the surrounding counties from Alexandria/Arlington to as far south as Richmond County and from east on the Potomac and Rappahannock Rivers to the Shenandoah (and all points in between!). Between the military, corporate, and government relocations, having an agent working to provide you with the latest statistical information and market trends is imperative to a successful sale or purchase. Also, as an e-Pro, finding you homes and communicating that to you becomes increasingly efficient, as does marketing properties for sale. Using exceptional photography for virtual tours, staging all listings, and incorporating "out of the box" methods to generate the largest number of buyer leads while Marketing Your Property For Sale, I can save you time, money and frustration. Start your search for homes at http://www.IreneMoralesWard.com!
This entry was posted in Auctions, Distressed Properties, Fixer Upper, Foreclosures, Home Buyers, Home Repairs, Mortgage Lending, Mortgages, Short Sale and tagged , , , . Bookmark the permalink.

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