JoAnn Asselin's Blog
Many foreclosures are often sold “as is” and require some work. The seller may also be more open to negotiating a lower price based on the number of repairs that need to be done. You could save quite a bit of money if you can do a lot of the work yourself.
Some lenders have loan programs that are specifically for fixer-uppers. They lend you the amount needed to purchase the home and extra money to make repairs to the house. However, you will have to follow the lender’s rules. The rules vary from lender to lender, but could include:
Doing a percentage of the work yourself
Living on the property
Completing a portion of the work within a specific amount of time.
If you are required to live on the property, you could set up an RV or live in a section of the house that doesn’t need extensive repairs. You could even convert an outbuilding to an in-law apartment.
Know What Has to Be Done
Before you commit to a loan with terms for extra money to fix up a home, go through the house to make a list of everything that absolutely must be done. You might make a second list of things that you would like to do that do not stop you from living in the house.
Determine the costs of the “must-do” repairs to make sure you have enough money to make those repairs. Then, estimate the time it will take you to make those repairs.
Once you determine that you have enough money to at least get the house habitable and can do it within the lender’s terms, you are ready to make a bid!