Do you buy homes that obviously need improvement just because you foresee their great potential? Perhaps they lie near the beach or countryside; or are located in a tropical environment similar to Gainesville Fl condos or homes in Gainesville Fl. If so, these homes either need substantial work done or minor repairs here and there. The big question is: how do you get a lender to invest in your lofty creative goals? Can you get the seller to fix something, even cosmetic before closing?
Lenders Want Home Appraisals and Home Inspection
Upon striking a deal on your project, one of the first things you’ll want to do is have your potential home inspected for structural integrity and defects. Note, a home inspection is not the same thing as a home appraisal. A property appraiser is concerned with the home’s market value, while an inspector cares about the health of the home. The inspector evaluates whether the plumbing is up to code and roofing are properly sealed (no leaks), etc.
Is an inspection really necessary after an appraisal has been performed? Look at it this way, if the tropical homes in Gainesville Fl or condos in Gainesville Fl need improvement, it’s the inspector’s job to crawl through these homes and detect maladies to protect you; banks will also insist upon it. In fact most banks will not ask for the appraisal until the inspection has been done.
What If You Want to Settle Repairs Just with the Seller?
Suppose only minor repairs are necessary for the Gainesville Fl homes but the seller wants the assurance that you can pay before committing to the improvement. Let’s say the condos in Gainesville FL need overhaul of their wall-to-wall carpet and the seller agrees to hand over a check for newly laid carpeting after the lender issues the mortgage. This is called a seller’s concession, but unfortunately, it’s often not agreed upon by all the players, namely the bank.
If carpet upgrades cost $8,000, a lender won’t let a seller pay you, the buyer $8,000 at closing. If the carpet is laid before closing, that’s fine, otherwise, no deal! This stipulation is important to know and your real estate agent can help guide you in the right direction.