Homebuying As-Is: How to Get a Great Deal on a Fixer-Upper

Many prospective homebuyers believe they need piles of cash to purchase a property. But negotiation is the name of the game, and there’s typically room for a bit of haggling on pricing and repairs. Knowing what the seller will and won’t handle is a big part of the financial equation.

Decide What Should the Seller Be Responsible For

Depending on the type of mortgage you obtain, the bank may require the seller to fix safety-related issues. For example, FHA loans require repairs on items like defective roofs, serious plumbing problems, and exposed wiring. VA loans have similar inspection requirements.

If you have a conventional loan — or you’re paying cash — you have more flexibility when it comes to deciding what type of repairs are needed, the Nest highlights. Of course, even if your mortgage lender mandates certain renovations, the seller may not be responsible for them. You and the seller of the property can determine who will pay for and perform the necessary labor.

Remember that depending on the housing market, a seller may already face steep costs to get a property sold. Between realtor commission, staging fees, home inspection bills, closing costs, and taxes, it costs more to sell a house than you might expect. That said, many sellers are eager to close on the property as quickly as possible — even if it costs them.

When and What to Fix

Even when you’re working with a seller who is willing to negotiate, you aren’t in the clear yet. Next, you need to determine your move-in timeline, including what you want to be fixed before you take ownership of the property.

Think about whether to address renovation concerns before you move in. For some loan types, this may be your only option. With pre-closing repairs, you and the seller agree on what is necessary and how to pay for it. For example, the seller may agree to replace the HVAC system before closing but they may only want to spend a set amount.

If you decide to have the costs credited during the closing, you have the freedom to choose how and when to handle renovations. In some cases, asking for credit can turn out to be a better deal for you. Especially if you are handy with tools, replacing flooring or addressing cosmetic concerns are relatively simple.

Purchasing a property as-is can be either a great deal or a money pit. Doing your research and understanding the problems the house has are ideal first steps. Then, you can go on to make an excellent deal that the seller can’t refuse.

Of course, with over 15 years of experience selling homes in the area, Dan and Connie can guide you through the process and take away the stress and anxiety of the process.  Just give us a call and we can get you started on the right track.