| It may be your budget, or the thrill of doing | | | | deck painted, make sure it is in the |
| it all yourself, but you are in the market | | | | contract. If it is, the seller must perform. |
| for a diamond in the rough. But just how | | | | You may be able to have the appraisal include |
| rough can a house be before a lender decides | | | | the repairs spelled out in the contract. This |
| not to take the risk on a mortgage? | | | | can help you when getting a mortgage, as |
| | | | lenders will only lend on the lesser of the |
| When you negotiate the contract, make sure | | | | appraisal or purchase price. Just make sure |
| that you include a provision for a home | | | | that it is all in the contract. |
| inspection for structural integrity, defects | | | | |
| and potential problems. This isn't part of | | | | Occasionally, your seller may ask to perform |
| the appraisal, it is a separate detail. A | | | | the repairs after closing. Many buyers simply |
| home inspection ascertains the health of the | | | | ask for a seller's concession. Instead of |
| house you are buying. Whether it be a bad | | | | installing a $5,000 carpet before closing, |
| roof, leaky plumbing or termite damage, a | | | | the seller agrees to reduce the purchase |
| professional inspector will find all of the | | | | amount by the $5,000 it will cost the buyer |
| major problems. As part of your report, you | | | | to put in new carpeting. |
| will receive a list of what needs to be | | | | |
| repaired or replaced, the time frame and the | | | | But if you don't have that $5,000 in hand to |
| potential costs. If you are buying a | | | | buy the carpet, don't expect your lender to |
| fixer-upper, you may find that your lender | | | | give it to you. Even if your contract states |
| will require an inspection. Some will and | | | | that the seller will give you back $5,000 |
| some won't. But you should insist on one to | | | | after closing, don't expect it to happen. |
| protect your best interests. | | | | Cash allowances written into contracts can't |
| | | | happen. The lender will not allow the seller |
| What if you luck out and there are no major | | | | to hand over cash at closing. Your real |
| problems, just minor ones? Maybe the carpet | | | | estate agent should steer you away from this |
| is worn and needs replacing. Perhaps the deck | | | | and help construct a sales contract that will |
| needs a little work. New paint and fresh air | | | | please both the buyer and the seller. But |
| could be all it needs. | | | | don't expect to come home with $5,000. It |
| | | | just won't happen. |
| Minor, cosmetic concerns are usually not | | | | |
| strong enough to scare away lenders, but | | | | Buying a fixer-upper can be rewarding. You |
| could lead to negotiations between the buyers | | | | get to choose how you want to improve the |
| and sellers. Unless you've done this before, | | | | home. But it is a lot of work and definately |
| you may find a good agent is invaluable to | | | | not for every buyer or lender. Your best bet |
| negotiate for you. | | | | is to be completely upfront with your lender |
| | | | about your intentions. This will help the |
| If you want certain things repaired by the | | | | transaction to go smoothly. |
| seller, such as the mailbox fixed and the | | | | |