You May Be Able To Negotiate A Lower Selling Price By Offering A Quick Close On The House

Category: Finance, Real Estate.

Some people, while combing the real estate ads, shy away from the cheaper listings labeled, "Handyman Specials" or" Fixer- Uppers" .

This is true, but for a smart buyer, this translates into" profit" . These properties have often been neglected and mean extra work for the new owner. Don t get me wrong, investing in a distressed home is not easy money, but the opportunity to make a substantial profit from restoring these houses can be very real. Here are some of the considerations when assessing a potential investment property: Use a professional realtor or appraiser to determine a realistic selling price based on the market and the neighborhood. The possibility of losing money is also a reality, and the investor needs to do their homework and know exactly what they are buying and what sort of profit they can expect. You can complete a dream renovation, but if the neighborhood can t support the type of buyer you are attracting, your home will never sell.

Use the services of a house inspector to get a detailed analysis of the condition of the home. If the market is declining and home prices are dropping, this too will affect your selling price. Learn what is worth fixing and what you should walk away from. Assess which improvements you will be able to handle on your own and which you will have to contract out. Will you mainly be concerning yourself with cosmetic repairs or will you be ripping out plumbing or making costly repairs to the foundation? When calculating the costs, make sure you get at least three estimates for these, you will be surprised at how much the price can vary. Get a good understanding of which renovations increase the resale value of the home and stay away from the one s that will only add to your bottom line.

Determine if a building permit will be required, as the cost should also be added to your budget. Most fixer uppers are the result of some form of distress sale, be it divorce or bankruptcy. You may be able to negotiate a lower selling price by offering a quick close on the house. These people want to unload it quickly and that sense of urgency can work to your advantage. Another option is to buy new, have a builder complete the shell of your investment property, and you complete the inside, making the profit on all the finishing work. The money down subsidizes the interior renovation.

Often you can have the property sold before you build. Whether building new or renovating you will need to do a cost analysis to determine whether this investment will yield the profit you are expecting. Decide whether this final figure is worth the effort. Calculate the buying costs, closing fees, selling costs, legal fees, taxes, commissions, interest on loans, miscellaneous fees and, repairs take this total( probably pretty big) , and subtract it from your expected sales price. Investing in fixer- uppers is a very simple process. You need to know what to look for in a bargain house, be thorough in completing your cost of repairs vs. selling price analysis, and then sell it at a profit.