One of the most frequent questions I get from Home Buyers is whether they can buy a “fixer-upper” home or not. The answer I give them is, “It Depends.”
There are lots of considerations when deciding what type of home you’ll invest in. One that is “move in ready” or one that needs some work. It will depend on whether you can put in the “Sweat Equity” or if you are getting a loan in which the home must be “safe, sound, and sanitary.”
If you’re looking to put in some work and have money to put down, you should consider purchasing a foreclosure or a “fixer-upper”. You should go to your lender first to make sure you can invest in this type of home. You will more than likely need a higher down payment and need to get an appraisal both pre and post repairs. I always encourage buyers to make sure you do a thorough inspection when purchasing. You can run into some expensive repairs that could cause some major headaches and undue stress. Even if you’re purchasing ” As Is”, know what you’re buying.
When you’re making those repairs, are you planning to do them yourself or contract them out? I would suggest getting bids on the needed repairs when making the offer. If you’re going to do them yourself, don’t cut corners! You’ll be glad you did the appropriate repairs if you ever decide to sell your home. One of the worst things you can do is cut the corners and have to do the repairs again for a new buyer. It is possible that you can finance in those repairs with your home loan. Get all the Facts First!
Some key things to ask yourself:
- What will the total investment cost you, before and after repairs
- What will the home appraise for before and after repairs
- Can you do the work yourself or can you afford to contract out the repairs
- How ‘resaleable’ will your home be if you had to sell it quickly
- Do you have the time to invest in the repairs
- Can I finish the repairs in a timely manner
- Have I inspected this home thoroughly and looked for hidden defects
- Do I have the money I need to complete these repairs
If you’re anwered “yes” to these questions, then Bravo! Get to work! Sweat Equity, Here I come!
If you’ve answered “no” then maybe you should look at a home that is move in ready.
There are certain advantages to buying a home that is move in ready. If you don’t have the money or time to invest in repairs, then buying this type of home may be what you need. You can typically purchase one with a lower down payment.
Regardless of which way you go, be sure and work closely with your Real Estate Agent and your lender to see what is best for you. Your Real Estate agent can help along the way with each concern that may arise. When making your decision, make sure your agent writes your offer with your best interest in mind. In the AR Real Estate Contracts, your agent should excerise your right to the 10 Business Day Inspection Time frame. Either way, you want to make sure you know what you’re buying and if it’s the right choice for you. Sometimes, you may think you’re buying the move in ready home, only to find yourself making lots of repairs after the purchase! Don’t fret, find yourself a good agent. If you need an Agent in the Clarksville Ar or Russellville AR and surrounding area, Call Teresa Smith, RE/MAX First.