With Vision a Fixer-Upper can be A Great Buy! -bijoux perles eau douce

With Vision a Fixer-Upper can be A Great Buy! By: W.C. Thomas

It may be your budget, or the thrill of doing it all yourself, but you are in the market for a diamond in the rough. But just how rough can a house be before a lender decides not to take the risk on a mortgage? Is there a point that your mortgage lenders says that the "Fixer Upper" home that you are looking at, is not worth fixing up? Even though you may be a wonderful handyman or maybe this is all that your budget will allow, you need to know what you're getting into.

When making an offer on a property, make sure that you include the provision that the contract is subject to a home inspection. You certainly don't want any surprises after you move in, which could have been discovered during a home inspection.Home inspections are conducted separately from the appraisal and are generally paid for by the buyer for their own safety. A home inspection will give you an overall look at the homes operating systems. Whether it be a bad roof, leaky plumbing or termite damage, a professional inspector will find all of the major problems. As part of your report, you will receive a list of what needs to be repaired or replaced, the time frame and the potential costs. If you are buying a fixer-upper, you may find that your lender will require an inspection. Some will and some won't. But you should insist on one to protect your best interests.

What if you luck out and there are no major problems, just minor ones? Maybe the carpet is worn and needs replacing. Perhaps the deck needs a little work. New paint and fresh air could be all it needs.

Lenders are usually not concerned with minor cosmetic problems, but the buyers and sellers may negotiate on repairs or replacement costs on these items.Having a good real estate agent, who is a trained negotiator, to deal with these issues is a great value at this point in the deal.

Make sure any items that wish to be repaired, such as the deck painted or carpet cleaned by the seller, are in the contract. If it is, the seller must perform. You may be able to have the appraisal include the repairs spelled out in the contract. This can help you when getting a mortgage, as lenders will only lend on the lesser of the appraisal or purchase price. Just make sure that it is all in the contract.

Occasionally, your seller may ask to perform the repairs after closing. If this is the case, many times a buyer will simply ask for a seller's concession. Let's say that instead of having the home re-roofed before the closing, the seller agrees to reduce the price of the home by the same amount as it will cost to have the roof repaired.

But if you don't have that money in hand to repair the roof, don't expect your lender to give it to you. Even if your contract states that the seller will give you back $5,000 after closing, don't expect it to happen. Cash allowances written into contracts can't happen. The lender will not allow the seller to hand over cash at closing. Your real estate agent should steer you away from this and help construct a sales contract that will please both the buyer and the seller. But don't expect to come home with $5,000. It just won't happen.

The purchase of a fixer-upper can be a great experience. It's your choice how the home is fixed up. But it is a lot of work and definately not for every buyer or lender. Make sure that you are upfront with your lender about your idea to buy a "handyman special." This will help the transaction to go smoothly.

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