A Fixer Upper
Purchasing a property that fulfils every requirement can be a costly affair. Size of the house, location, exterior and other features may cost far more than the pocket can handle. Therefore, the trick is to purchase a house that requires improvements and repairs. Known as a fixer upper, the house can be remodeled to fit ones needs. Once the fixing and repairing is parallel to the requirements of its new homeowner, ‘sweat equity’ is created.
What is Sweat Equity?
Before investing in a property that is inexpensive and requires a few repairs here and there, the key is to analyze whether the property has potential or not. Once the analysis is complete, effort should be made towards increasing the value of the property. Sweat equity occurs when a homeowner engages in value increasing improvements for their own property. Therefore, an inexpensive house is transformed by the hard work of a homeowner into a valuable asset.
The Real Estate Agent
The person, who can assist you to look for the right house based on your requirements, is a real estate agent. The potential estimate put forward by the agent based on the condition of the house can be of great assistance. Discovering deficiencies such as a roof leakage and the like can lower the value of the house greatly. The agent is likely to be a good source for the value of the house and the amount of investment it would need for the mending.
Home Inspection and Appraisal
The lender needs a good assessment of the property, therefore undertaking the home appraisal and home inspection can be an initial step. Home appraisal is the market value of the house and is the basis for the mortgage or loan approval from a bank or any other investment source. A low appraisal value can be detrimental for the market standing of the house.
On the other hand, home inspection focuses on the condition of the home. Any major or minor repairs and fixes in the house are based on the result put forward by an inspector. The decision made by a lender is based on the results of both the home appraisal and inspection.
Settling the Repairs
Several a times the seller is willing to make the repairs, after the potential homebuyer commits to the property. In case that does not happen, then the new homeowner will be required to invest time and money in the house to raise its value and make it livable. Either the repairment work can be done by the home owner themselves or by a professional worker. At this point, it is beneficial to keep in mind the amount of money that can be invested in the endeavor. If the seller is willing to mend the repairs themselves, make sure to inform them of the requirements and needs. Negotiate in a manner that the seller obtains an approval from the committed buyer for the renovations.
A real estate agent can be a great source of guidance throughout the process of buying a fixer upper property. If the aforementioned suggestions are kept in mind, the lender will be willing to invest in your plans related to the property. Contact the Gainesville Real Estate agent today.