Here are some effective, real-life strategies that buyers can use to spot lemons and avoid purchasing a home the requires expensive repairs:
Go to Inspections
Sure, you can outsource the duty of inspecting the properties that you are interested in purchasing to ensure everything is getting looked over, but that doesn’t mean you are off the hook either. You should be present for every single home inspection, from pest inspection all the way to the plumbing. When you are seeing everything in person and able to discuss certain things with a professional, you can get a clearer idea of what you are working with. Written reports and photographs often don’t do certain issues justice, and you may underestimate the extent of some damages.
If you do find things that need repairs, be sure to ask the inspector for an estimate of how much the project will cost to get a general idea.
Read Reports and Disclosures
Going to the inspection is just one step towards avoiding making a regrettable purchase. Read the reports that are written up by the inspectors as well as those given to you by the seller. Usually, the reports will disclose things like present damages, past projects completed by the seller, repairs that need to be repeatedly done (such as continuous repairs to the water heater or a septic system that always backs up), water damage, leaking, and much more.
Pay attention to things like the amount each project may cost, how long it could take to finish the repairs, and what items are the most costly. Also, consider the recommendations you receive from the inspectors, since they will know which problems could be overwhelmingly expensive, such as pest damage or mold.
Acquire Repair Bids
If something does need to be done, whether it relates to electrical, plumbing, pests, or water damage, you will need to acquire repair bids. Most general property inspectors will not provide you with this. You will need to contact specialists to help.
Why is this important? Most money pits are the houses that people buying assuming just a small amount of work is needed. However, once they purchase the home and start doing the repairs, they realize that the cost is much more than originally estimated.
With repair bids, you not only get a clear picture of how long things could take to be repaired or replaced, but also if the overall cost of the repair is worth the price of the house. You can use bids to also renegotiate the contract between you and seller if need be.
Seek Out Price Reductions, Not Seller Repairs
More often than not, buyers are going to trust professionals to do the repairs on their new home over work done by the seller. If you do plan on buying a home that needs things replaced or repaired and will have to pay for that on your own, then you should ask for either a closing cost credit to negate the cost of repair or get the overall price on the property reduced. That way, you won’t have to funnel as much money into the project.
Now that you know how to avoid a money pit, be sure to keep these tips in mind. Don’t underestimate the usefulness of a thorough inspection or several, and get some repair bids so you can negotiate on the price. By being savvy with repairs, you can save money and eventually get your dream home.