Many home buyers get excited about buying a “fixer” home, getting their “HGTV” on. They envision themselves enjoying a cool beverage in their low cost, newly renovated home! I am all for some sweat equity, but let’s talk about some of the things you need to know when buying a fixer from the bank. Here are Myths and Facts about Buying a Fixer Home from the Bank in Snohomish County and Skagit County.
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FACT: Not all loans will allow you to purchase a fixer.
Some loans like FHA or VA want the home in move in ready condition. The appraiser will flag a home that is not, and will require the seller to make the repairs before you close. This is a problem with as-is properties where the seller will do no repairs. You can get around this by using a rehab loan. Talk to me about getting connected with a professional loan officer that offers rehabs.
MYTH: “There’s concrete in the pipes”
Often times my clients ask about sellers putting concrete in the pipes and other malicious damage to the home. Although definitely not unheard of, this is not the norm. The previous owners often just got in over their heads and don’t blame the banks for the foreclosure. Often the condition of the home is poor simply due to neglect.
FACT: You CAN have an inspection!
“AS-IS” and other disclosure made by the banks about radon gases and other scary things often convince buyers that they cannot have an inspection and are buying the house with a laundry list of possible tragic flaws! This is NOT true. You can have inspection of a home whether it is as-is or not. You can get out of the purchase and get your earnest money back if during the inspection you find a condition that you are not comfortable with. The disclosures and as-is simply mean that the owner/seller will make no repairs and the buyer is expected to inspect the house to their satisfaction.
MYTH: It’s a Foreclosure so it Must Be a Great Deal
Not all bank owned properties are offered at a discount price. In fact, most start out at market value. Why do the banks do this? They want to get as much money as they can out of this property. They didn’t receive any payments from the previous owner for many months, years in some cases. And on top of that, the bank had to pay the costs of the foreclosing on the property, paying back taxes, and putting the house on the market for sale. It all adds up and the banks want to re-capture as much money as they can so they list the house at market value.
FACT: You Can Buy a Bank Owned Home at a Discount
To buy a bank owned home at a discount, you need to work with an experienced real estate agent. Your agent will know when the best time is for you to make a discounted offer that is more likely to get accepted. Banks accept offers based on where they are in the process and reduce the price according to their internal formula. An experienced agent such as myself is able to guide you through the process so that you can buy a home at a discount.
Those are my myths and facts for buying a fixer home from the bank. I have seen my clients make some beautiful transformations and enjoy them for years! If you are looking for a home, fixer or otherwise in Snohomish, Skagit, or Island counties CLICK HERE to schedule an appointment with me or call me at 425-359-0181.
Keller Williams NWRE LLC
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