Before making an offer, these are the things you should consider so that you know what you are getting yourself into:
1. Decide what you can do yourself
- Do you really have the skills to do it?
- Do you really have the time and desire to do it.
2. Price the cost of repairs and remodeling before you make an offer
- Get your contractor into the house so he can give you a written estimate on the tasks he’s going to do.
- If you are doing the work yourself, price the supplies
- Tack on 10% – 20% to cover unforseen problems
3. Check permit costs
4. Doublecheck pricing on structural work
- If the home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put an offer in
5. Check the cost of financing
- Get yourself pre-approved for any home equity or home improvement loans
6. Calculate your fair purchase offer
- Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.
7. Include inspection contingencies in your offer
- Home Inspection
- Radon, Mold, Lead-Based Paint
- Septic & WEll
- Pest (termite)
Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.