How Much House Can You Afford?
When you first decide to start shopping for a new home, the process may seem easy. First, you establish your budget. Then you find a home on the market that you like that's in your price range.
Date: 5/23/2022 10:44:36 PM ( 40 d ) ... viewed 18 times
When you first decide to start shopping for a new home, the process may seem easy. First, you establish your budget. Then you find a home on the market that you like that's in your price range. However, when you find a house that's nearly perfect but not quite, you need to factor the cost of future home renovations into your offer. If you aren't a seasoned contractor or professional estimator, you may struggle with this task. It may be incredibly helpful at this point to consult with an expert and then exercise good negotiation techniques.
Consult an Expert
Unless you've completed home renovations before, it's likely going to be very hard for you to know how much the total cost of a renovation project will be. But you have to have an estimate of these costs so that you can factor them into your mortgage qualification calculator. If there are only one or two things wrong with the home you're eyeing, you may be able to consult a subject-matter specialist. If the roof leaks, call on a roofing expert to examine the home before you make an offer. Ask him or her to give you an estimate on what the repairs will cost. If the plumbing appears out-of-date, call a local plumber to check out the issue and give you an idea of how much you'll spend to update the pipes.
If you have a laundry list of items you would need to have done in order to make the house a home, it may be better to call a general contractor for advice. This should be an individual who is experienced in new construction or full-home renovations. Give him or her the list of things you will need to have done and he or she should be able to make an educated guess as to what the projects will cost as a whole. A general contractor may be able to also spot issues that you didn't notice at first and save you headaches you didn't see coming.
Negotiate for a Lower Price
Once you have an estimate of how much the desired renovations will cost, add this number to the asking price and determine whether the combined amount is still within your budget. If not, don't give up immediately. Try negotiating with the seller. Especially if at least some of the renovations deal directly with flaws in the property, you may be able to convince the seller that the asking price should be lowered to account for those deficiencies. When speaking to the current homeowners, be careful not to insult the property.
While professional realtors usually charge a fee for negotiating on your behalf, it may be worth it to hire such an expert. Even when the fee is taken into account, their expertise may bring the price down to a point you can afford. Realtors may also have connections in the contracting world that can help you estimate the cost of your renovations. Often you may have to gather these estimates quickly as other shoppers may be interested in the property as well. In these cases, it's nice to have a realtor to help you navigate the process quickly so that you don't miss out on the opportunity to bid.
One of the most important rules to follow when purchasing a new home is to stay within your budget. It's hard to enjoy living in your new house when you're constantly fretting about whether or not you can afford the mortgage. Many home shoppers struggle to find that perfect property at a price point they can afford. Purchasing a home and then renovating it to fulfill your needs is a common strategy. However, when you find that almost perfect fixer-upper, it's important to know how much the fixing up will cost before you make an offer. Otherwise, you may be living in a nearly perfect home with no money left over to make it into the house of your dreams.
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