| It may be your budget, or the thrill of doing it all | | | | such as the mailbox fixed and the deck painted, |
| yourself, but you are in the market for a diamond | | | | make sure it is in the contract. If it is, the seller |
| in the rough. But just how rough can a house be | | | | must perform. You may be able to have the |
| before a lender decides not to take the risk on a | | | | appraisal include the repairs spelled out in the |
| mortgage? | | | | contract. This can help you when getting a |
| When you negotiate the contract, make sure that | | | | mortgage, as lenders will only lend on the lesser |
| you include a provision for a home inspection for | | | | of the appraisal or purchase price. Just make sure |
| structural integrity, defects and potential problems. | | | | that it is all in the contract. |
| This isn't part of the appraisal, it is a separate | | | | Occasionally, your seller may ask to perform the |
| detail. A home inspection ascertains the health of | | | | repairs after closing. Many buyers simply ask for a |
| the house you are buying. Whether it be a bad | | | | seller's concession. Instead of installing a $5,000 |
| roof, leaky plumbing or termite damage, a | | | | carpet before closing, the seller agrees to reduce |
| professional inspector will find all of the major | | | | the purchase amount by the $5,000 it will cost |
| problems. As part of your report, you will receive | | | | the buyer to put in new carpeting. |
| a list of what needs to be repaired or replaced, | | | | But if you don't have that $5,000 in hand to buy |
| the time frame and the potential costs. If you are | | | | the carpet, don't expect your lender to give it to |
| buying a fixer-upper, you may find that your | | | | you. Even if your contract states that the seller |
| lender will require an inspection. Some will and | | | | will give you back $5,000 after closing, don't |
| some won't. But you should insist on one to | | | | expect it to happen. Cash allowances written into |
| protect your best interests. | | | | contracts can't happen. The lender will not allow |
| What if you luck out and there are no major | | | | the seller to hand over cash at closing. Your real |
| problems, just minor ones? Maybe the carpet is | | | | estate agent should steer you away from this |
| worn and needs replacing. Perhaps the deck needs | | | | and help construct a sales contract that will please |
| a little work. New paint and fresh air could be all it | | | | both the buyer and the seller. But don't expect to |
| needs. | | | | come home with $5,000. It just won't happen. |
| Minor, cosmetic concerns are usually not strong | | | | Buying a fixer-upper can be rewarding. You get to |
| enough to scare away lenders, but could lead to | | | | choose how you want to improve the home. But |
| negotiations between the buyers and sellers. | | | | it is a lot of work and definately not for every |
| Unless you've done this before, you may find a | | | | buyer or lender. Your best bet is to be completely |
| good agent is invaluable to negotiate for you. | | | | upfront with your lender about your intentions. |
| If you want certain things repaired by the seller, | | | | This will help the transaction to go smoothly. |