Tips for Buying a House That Needs Work

Tips for Buying a House That Needs Work Perceptions vary widely when buying a house that needs work, just ask any home buyer.

Better yet, ask a real estate agent, because many agents believe a house needs work if the house is not updated. Take a home built in, say, the 1940s, back when kitchen counters were often covered in four-inch tile and not trendy stone or concrete. Maybe 4628971-krow-sdeen-taht-esuoh-a-gniyub/moc.ecnalabeht.www//:sptth

the cabinets are painted wood, and the floors are linoleum. A millennial buyer will say a home in that condition would need work. A purist who loves the character of 1940 homes might prefer its original condition and disagree.

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Types of Houses That Need Work Since work is often in the eye of the beholder, let's talk about the types of houses that could use work. Further, how you would pursue a purchase offer will most likely depend on the category, the type of home you are buying that needs work.

One thing you should not fall prey to is the tendency to wrongly presume that the listing price has not already been adjusted for the fact you are buying a home that needs work.

Most sellers already realize the home needs work and have accounted for it when pricing the home. Sellers aren't interested in who is subsidizing a buyer's home improvement dreams. Yet that doesn't stop buyers from trying to discount an already discounted price.

Fixer-Upper The fixer-upper homes are generally priced for a sale in their AS IS condition. These homes often show deferred maintenance because the sellers were unable or unwilling to care for the home properly. Maybe there has been a death in the house, or it passed through probate to heirs who don't want it. In some cases, the exact condition might be unknown.

To compute a price on the fixer-upper house, sellers will generally choose a sales price based on the comparable sales, and then they further reduce the price by the estimate for repairs. They might deduct a little bit more from the price for a fast sale. Whether it becomes a flipper house for an investor who is hoping to turn a fast buck or a home for a first-time home buyer depends on profit margins and the amount of work that is needed.

Mint Condition Vintage This type of home could sell at a premium, even though it is not necessarily modernized nor trendy. Think about Folk Victorians or Italianates or Queen Annes or Craftsman bungalows. Becoming increasingly popular are mid-century homes from the -- gasp -lifetime of 1950's and 1960's architecture such as Eichlers or Strengs.

To price these types of homes, a seller would probably add a premium price pad on top of the comparable sales. The owners might receive multiple offers, simply due to the attractiveness of the design and well-maintained interior and exterior. If the fixtures are original, the sales price could go even higher.

Newer But Outdated You spot a lot of these types of homes in areas that were once thriving before becoming depressed. Maybe the area was overbuilt, and supply exceeded demand. Perhaps jobs left town. Or, another tract of homes opened up a few miles away for less money. Whatever the reason, owners often have little interest in remodeling

Short Sale The short sale house is perhaps the most misunderstood type of sale, especially when the house needs work. If a seller can't afford to make a mortgage payment, the seller probably can't afford to make repairs or fix up the home. Not only that, but the seller's lender has little incentive to cooperate with a short sale unless the price is in line with the market. Banks typically do not discount the price they will accept for a short sale home, even if the home needs work. Â a home just because trends change. After all, they figure the home was fine when they bought it, and it's fine to sell it now.

The Packrat Not every messy house is a packrat house, but the packrat houses are the worst. These are the homes where you might need to navigate through on tight paths woven around stacks of personal belongings throughout the house. Sometimes the bedrooms are so full of furniture and boxes that you can't get the door open. Packrats collect and save stuff, and sometimes are attracted to odd things such as balls of lint or shredded newspapers.

Foreclosure Buyers often say they want to buy a foreclosure, which is a bankowned home, but that's only because they don't have a firm handle on what that entails. Almost invariably they are sold in AS IS condition.

Banks are not held responsible for disclosing facts they do not know.

Also, unless a defect is discovered later, which turns out to be a major repair cost, banks are reluctant to offer discounts for work.

Buyers might spot what are called pre-foreclosure houses on certain popular websites, but those are often not for sale at all and may never be for sale.