Buying a fixer-upper home can be one of the best purchases you could ever make. Some of these homes may require cosmetic improvement such as painting, carpeting, or adding new flooring and some may require major rehabs, but buying these types of properties can be a great opportunity as long as you know what you’re getting into.
How to buy a fixer-upper:
The first step to buying any property is to consult with a Realtor. Your Realtor will provide you with information about the property, help you gain access into the property and assist you in making an offer.
You will also need a home inspection by a credentialed home inspector in order to determine the physical condition of the property. In most cases, you will be able to cancel your offer if you are dissatisfied with the results of the inspection.
Get a professional repair estimate from a contractor or handyman to establish how much it would cost for material and labor.
How to finance a fixer-upper:
Many lenders will not finance a house that needs a lot of work. Fortunately, the U.S. Federal Housing Administration (FHA) has a 203K loan program that is specifically suited for fixing up properties in need of repairs. The streamline - 203K permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home prior to moving in. The loan can be used for discretionary improvements and/or repairs shown below:
· Repair/Replacement of roofs, gutters and downspouts
· Repair/Replacement/upgrade of existing HVAC systems
· Repair/Replacement/upgrade of plumbing and electrical systems
· Repair/Replacement of flooring
· Minor remodeling, such as kitchens, which does not involve structural repairs
· Painting, both exterior and interior
· Weatherization, including storm windows and doors, insulation, weather stripping, etc.
· Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
· Accessibility improvements for persons with disabilities
· Lead-based paint stabilization or abatement of lead-based paint hazards
· Repair/replace/add exterior decks, patios, porches
· Basement finishing and remodeling, which does not involve structural repairs
· Basement waterproofing
· Window and door replacements and exterior wall re-siding
· Septic system and/or well repair or replacement
If you are considering a fixer-upper home to live in and need additional information, call today for a free consultation and let me help you plan your move.
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