Special offer

Fixer Uppers Can Be Your Stepping Stone to Home Ownership

By
Real Estate Agent with Better Properties NW

You want a home that suits your needs and taste but a new or home in great shape is just out of your budget? Many first time and move up buyers are in the very same position even in this bargain driven market with short-sales and bank owned properties.  How can you get a great home that is fits your lifestyle and is in a great location?

 

Seek out a fixer property. If your not short on patience and have creativity and a project manager's mindset this may be the ticket to your dream property. Obtaining a loan for properties that were in need of rehab to meet loan guidelines used to be a complicated and long process. Now with the advent of FHA 203k streamlined loans the process is much faster and opens the door to buyers who otherwise would pass on a property that required this type of financing if the buyer did not have the cash to "cash out" the purchase price.

 

 

How do you go about seeking homes that qualifiy for this type of financing?  My suggestion is find a Realtor who has the experience to guide you to the right home for you. They will have access to a database of homes in the area you are seeking and can readily show most of them to you with proper notice.

 

Be ready, most of them will need TLC they may not be in move in condition until the construction required by the lender is completed. This is not a "turn key" situation. Many of the homes will require major repairs such as a new roof, new electrical, plumbing or structural repairs. 

 

Once you find a home you can make an offer, if your qualified by a lender who is experienced with and approved to do FHA 203k loans. The lender will explain the full process to you before you make an offer. With a preapproval your chance of getting an offer to be accepted by a seller greatly increases.

 

The offer is then made upon the condition that the home qualifies for a 203k program and contractor is then selected to go through the home to determine what repairs are needed to close the transaction and fund the property. An appraisal is also done to determine the value before and after repairs are completed. Always get a home inspection!

 

The repair "work order" is submitted with the loan documents to an underwriter to review and approve. The seller is paid the difference at closing and the contractors are paid by the bank in draws just like a construction loan until the work is completed.

 

The process takes more time than a conventional home to close and the buyer may not be able to move directly into the property until major repairs are made. All situations are different so it is best to find a highly skilled team to guide you through the process.

 

What is the value of buying a fixer? The great thing about buying fixer is your can tailor the repairs and improvements to your taste, and in many cases get far more home in a better location than a traditional sale, at a fraction of the cost. It all boils down to "sweat equity" you can gain equity if you buy smart and hire the very best team to do the job. Homework comes into play, study, and check all references of everyone who is involved.

 

Buying a home is a big investment, buy smart and don't over extend yourself be budget aware when determining what you can afford.

 

 

 

 

Matthew Miller is a licensed Real Estate Broker in Washington State

 

 

 

 

Disclaimer:

Information provided by author is not warranted reader should investigate to their sole satisfaction.

Comments (0)