Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

What you need to know before investing in a damaged home

10/15/2019

Download PDF

What agent hasn’t been there? Your client finds a house that draws them in. It’s in the right neighborhood, within budget and has the potential to explode in value over the next few years. However, the home’s a fixer-upper or has weathered serious damage from past residents. There are signs of mold on the ceiling, damaged insulation or foundation issues.

Cara Ameer

It is not always easy to know how to advise buyers and investors who eye a less-than-perfect property. While past damages need to be disclosed, some love a good home repair project while others will not even want to deal with painting the walls. Some expect to do one or two repairs and forget about it while others specifically seek out properties that have been damaged in hurricanes and fires as a cheap investment.

“Generally, the less expensive the property is, the more it will cost to bring it up to par,” Cara Ameer, a broker associate from Northeast Florida, told Inman. “You may have to weigh the cost between doing repairs and tearing it down and starting all over.”

Buying a damaged property is always a risk and a commitment. Here’s what both investors and agents who are working to sell damaged homes need to know:

Have A Clear Plan:

What’s in it for you? How real estate organizations boost your business. See why associations like AREAA can benefit you both professionally and personally READ MORE

Does the buyer plan to live in the house or tear it down for the land? The answer to this question will affect how both the nature and the necessity of the required repairs. Making a risky purchase should always start with a plan — make sure your clients know what they plan to do with the property before they get knee-deep into the buying process.

“The dangers are that the repairs or remedies cost more than anticipated, and the house is no longer a ‘good deal,’” Lesslie Giacobbi, a Seven Gables Real Estate agent from Southern California, told Inman.

Get A Professional To Estimate The Damage:

It can be easy to see a property and want to go with your gut — it “feels” right, so you want to chance it. But it is especially important to have a specialist inspect an as-is property. The roof, the foundation, the sewer system, the walls, potential pest infestations and signs of past drug activity all need to be examined by a professional. That way, buyers will be able to not only know of things that are currently wrong but also be aware of problems that can arise in the future.

“Get the property thoroughly inspected – every component should be thoroughly checked by a specialist beyond a general home inspection,” Ameer said. “By bringing in multiple experts to check out the roof, foundation, systems, etc. you can hopefully avoid surprises or at least minimize them.”

Lesslie Giacobbi

Read The Sellers’ Disclosures:

No buyers should go off of what they see alone. Giacobbi advises thoroughly reading all disclosures and insurance claims for at least five years. You also need to go over titles to ensure that you’re not inadvertently getting unresolved liens with the purchase.

“The buyer should examine the title report to make sure that any liens will be removed and also that there are no easements on the land that will affect the way the buyer plans to use the property,” Giaccobi said.

Go Back Years:

Older properties and damage often go hand in hand. Along with regular signs of age-related decay, you also need to check for foundations, construction that aligned to past building codes and any fixes that previous owners may have made.

“Older homes tend to have off-grade foundations and the floors may not be flush and appear to slope to some degree,” Ameer said. ” There could be structural issues with the foundations underneath.”

Do Not Rush:

There are few things worse than making a financial commitment without knowing what you’re getting into. A good agent should not push a sale but rather be upfront and encourage hir or her clients to weigh the pros and cons of buying a house as-is. Just because a seller isn’t bothered by necessary repairs now does not mean that it won’t become a problem later.

Be Prepared For A Risk:

If you have weighed the pros and cons and decided to make the purchase anyway, be prepared to invest time and money into the property. It could turn into a cheap and easy investment or, even after putting in high-quality repairs, you can end up struggling to find tenants.

“You have to look at the current competition, comparable sales, current state of the market, as well as what the buyer expectations in the area are,” Ameer said. “Repairs can often be hesitation points for a buyer.”

Email Veronika Bondarenko

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • 6 time management tips for brokers and team leaders

    We reached out to team leaders and brokers for some of their game-changing ideas you might not have ...

  • A brief history of the open house

    Open houses, which have been evolving for 100 years, used to draw thousands of people and stretch on...

  • Pulse: How do you overcome ‘I want to wait for interest rates to drop’?

    We know you handle countless objections every day. In our ongoing quest to find the best handlers, w...

  • Smart-home tech for agents: Best smart outlets

    In this weekly column, hosts Brandon Doyle and Colton Pratt walk through smart-home products and sho...

  • S2E1 – A CEO State of Mind

    Leadership can be an elusive concept. There’s no true recipe for success, as leadership styles var...

  • As California rolls out short-term rental regulations, investors look elsewhere

    Los Angeles, which thanks to its beaches and good weather is one of the world’s most popular d...

  • Are open houses too dangerous to justify?

    Following a wave of headlines about open house-related crime, agents say safety issues are a growing...

  • Pulse: 26 handlers for ‘Another agent said we could get more money’

    We asked, and you all came out in droves to share your best responses. Our favorite handlers from la...

  • WATCH: IBuying disrupted — the Battle of the Behemoths

    Take a deep dive into your business and the new factors shaping the future of real estate at Inman C...

  • Proptech funding shows no signs of slowing down

    The U.S. real estate technology sector nabbed $1.9 billion in growth equity capital in 2019, accordi...

November 2019
Mon Tue Wed Thu Fri Sat Sun
« Oct    
 123
45678910
11121314151617
18192021222324
252627282930  

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...