Is fixer upper home right for a first time home buyer in Virginia?
Norther Virginia area has a unique Real Estate industry, with the low unemployment level compared to rest of the country, first time home buyer incentives and a high rental I have seen a big surge in first time home buyer ownership. Whether you are considering buying your first condo or a townhome or a single family home in Virginia we all know the needs, wants and desire needs to be distinguish while making the decision on purchasing the right home for you. Home ownership has become more attractive to first time home buyer with a low downpayment option on a FHA loan.
This surge has caused us low inventory for the almost a year, which has lead into once again multiple contracts situation or bidding war. Many of the buyers are left out feeling low and desperate to win the next contract they write. In this desperation lot of the buyers forget the cost of owning the home that needs work what we call it a fixer upper home.
What is a Fixer Upper Home?
Most of the home will need some basic needs that will reflect your personality like paint and carpet. However when you are walking into a home that has mold, original windows, heat pumps, water heater, polybutylene pipes, missing appliances or any major damage done to the property inside or outside the house. These repairs are significant cost to get the property in a livable condition.
What are the benefits of purchasing a fixer upper home?
Most obvious reason is fixer upper attracts less competition. That means you many be able to low ball or get a good deal on the home.
When the market improves your improvement will be more newer and attractive or you may have a larger percentage gain. With 203K loan and energy credit option available fixer upper home do sound attractive and doable.
Is fixer upper home ri g ht f or you?
Before you low ball and submit an offer on the property, get a contractor or a home inspector evaluate the property. Let them give you an estimate on the cost of the major/minor repairs that will be needed right away to make the home livable.
Next step would be speak to your lender, the appraiser may flag the repairs that are health and safety concern. What that means the repairs need to be corrected before the lender will fund the loan. Another option to discuss with your lender is, would you be eligible for a 203K loan program? This allows you to get a loan for the repairs on the home.
Million dollar question: Financial capacity? This is a big question to ask yourself. Do you have money after purchasing the home to fix up and pay for another rental property or temporary housing while the home is under repairs. Do you have the money to make the repairs? Budget your self for unseen/hidden issues you may run into while renovating.Do you have resource & time to hire contractors and manage the progress of the renovation.
So before you write your next contract on a home that needs extensive repairs or renovation do you home work. Speak to your Realtor, lender and consult the appropriate professional rather than wining the next bid.
Ritu Desai Associate Broker EcoBroker, ABR, ePRO, CAS Residential Top Producer Multi-Million Dollar Sales Club Member , NVARSamson Properties Cell - 703-625-4949 Email - info@eNOVAHomes.com Web: www.eNOVAHOMES.com
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