How to Buy a Fixer Upper House

Buying a home is an exciting task, full of unexpected incidents. Buying a fixer upper house offers further unique challenges, because the house usually requires major repairs. Typically, these houses cost less than comparable properties in the immediate area. However, once completed, the home’s value should increase because of repairs and renovations. Investing and researching a home significantly reduces the inherent stress of buying real estate. To buy a fixer upper home, you should ensure funding, conduct research, create a plan and complete the shutdown process.

Essential steps to be taken while buying a fixer upper house:

1. Determine the type of project that interests you.

The purchase of a fixer upper house requires time, money and patience. Many people underestimate the amount of work required to complete the project. For example, a house with structural problems can cost thousands of dollars to repair. On the other hand, you can rehabilitate a house that needs beautifying attention using your own time and skills or by contacting a contractor. Fixer upper houses run the range in the level of repair and the necessary funds. Be sure to select a home that meets your budget, schedule and skill level, patience and risk.

2. Secure funding.

Rehabilitation of financing is different from a typical mortgage. In addition to the monthly mortgage payment, you may need a construction loan or loan for renovation, depending on the extent of the work required. You can also contact private lenders for information about their mortgage products renewal. This type of financing allows you to “Finance the mortgage and the construction works at once,” says Bankrate.

3. Search for a suitable property.

Consider local schools and facilities in the area. Use a combination of research sources including online realtor databases, classified ads, foreclosure listings and scouting neighborhood. Consider working with a real estate agent who specializes in rehabilitation projects to expand your search.

4. Request a disclosure.

After locating a suitable property requiring rehabilitation within your budget, ask for a disclosure from the seller. A disclosure document the list of problems that the seller is aware. Disclosure may help with the estimated construction costs.

5. Make an offer.

You make an offer on a home by completing and signing a contract. Have a lawyer or your real estate agent to review the contract. Make sure you understand in detail the contract terms, conditions and requirements.

6. Have the property inspected by a professional.

The inspection process may reveal additional problems that the owner may be unaware. Inspection costs can range anywhere from $350 to $400. Follow the inspector during the inspection process to ask questions or address concerns. Contact the International Association of Certified Home Inspectors or the American Society of Home Inspectors to find a certified inspector.

7. Complete the purchase.

If the seller accepts your offer, signs the contract. The closing process includes the completion of paperwork in the office of an attorney or title company. In closing, payment and closing costs are distributed, and you shall receive the keys to your new property.