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  • 6 Simple Steps to Assess the Real Cost of a Fixer-Upper House

    Large red brick home with American flag and green grass

    6 Simple Steps to Assess the Real Cost of a Fixer-Upper House

    This will help you figure out how much to offer for a fixer-upper.

    Image: Susan Law Cain/Shutterstock

    Trying to decide whether to buy a fixer-upper house?

    Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

    #1 Decide What You Can DIY

    TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.

    Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

    Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

    #2 Price the Cost of Renovations Before You Make an Offer

    Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

    If you’re doing the work yourself, price the supplies.

    Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

    #3 Check Permit Costs

    Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.

    Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

    Factor the time and aggravation of permits into your plans.

    #4 Double-Check Pricing on Structural Work

    If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

    Get written estimates for repairs before you commit to buying a home with structural issues.

    Don’t purchase a home that needs major structural work unless:

    • You’re getting it at a steep discount
    • You’re sure you’ve uncovered the extent of the problem
    • You know the problem can be fixed
    • You have a binding written estimate for the repairs

    #5 Check the Cost of Financing

    Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

    If you’re planning to fund the repairs with a home equity or home improvement loan, get yourself pre-approved for both loans before you make an offer.

    Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

    Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation.

    The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans.

    A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

    #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.

    For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

    Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.

    The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

    Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

    #7 Include Inspection Contingencies

    Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

    • Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.
    • Radon, mold, lead-based paint
    • Septic and well
    • Pest

    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.

    If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.


  • 5 Back-to-School Tips When Moving into a New Neighborhood

    5 Back-to-School Tips When Moving into a New Neighborhood

    Selling a house, buying a new home, getting a new job, adjusting to a new place-moving is hard! It’s even harder moving as a family with small children during back-to-school season. With a new school year gearing up, RE/MAX has five tips to make the transition of moving to a new place and meeting new people a bit easier on your little ones.

    1. Know your neighborhood

    Before the first day of school, walk around the neighborhood as a family to meet the neighbors. Finding nearby families that also have kids will prove to be helpful on the first day of classes – a child starting school will be a lot less scared if they recognize a familiar face or two!

    1. Do your research

    Visiting the new school together before the first day will bring comfort to both children and parents. Knowing where the entrances, lockers or cubbies, classrooms and lunchroom are located will help a child start at a new school with confidence. It can help mom and dad too, easing your mind about your kids getting lost or embarrassed.

    1. Keep in contact

    One of the toughest parts about moving is the fear that kids have of losing their friends. Parents should promote a merging of two worlds: old and new. After the first day of school, encourage your kids to video call their old friends. Sharing stories helps them talk about their new experiences and gives them something to look forward to after a long day of firsts.

    1. Get involved

    Adjustment doesn’t happen all in one day. The first few weeks will likely be tough for a new kid. As parents, getting involved at your child’s new school will help both of you. You can familiarize yourself with the community and put your best foot forward. As for your child, catching sight of a familiar face at school in the first few weeks is comforting, even if that face belongs to mom or dad.

    1. Find an ally

    Summer is the peak moving season and the chances of you being the only family newly enrolled at school are slim. Take advantage of this commonality – seek out other new families and make new friends. You can use one another for advice (and some complaining) as everyone gets settled into their new community.

    Finding the perfect RE/MAX agent can make sure you find the perfect home in the right neighborhood for your family. Find one to work with on remax.com.

  • 4 Skills Your Re/max Agent Knows About Negotiating | RE/MAX NEXUS REALTY TRINIDAD AND TOBAGO

    4 Skills Your Re/max Agent  Knows About Negotiating |  RE/MAX Nexus Realty Trinidad and Tobago

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    Negotiating your deal is one of the most critical aspects of your real estate journey. It’s also one of the parts of the process where your real estate Agent’s experience can make the most dramatic difference. Your home purchase or sale, probably one of the biggest financial transactions you’ll make in your life, is not the time to test rookie negotiation skills. Here are just a few things RE/MAX Agents, as professional negotiators, know that help them reach the best closing agreement for you.

    1. That knowledge is power
    In addition to their in-depth knowledge of the real estate market and valuing a home, your Agent will have dug into public records about the property and the neighborhood. Your RE/MAX Agent will also consider the seller’s motivation. Knowing things like whether the seller is under pressure to move quickly can help shape negotiating strategy.

    2. How to time it
    Sometimes in real estate, a quick response to an offer is critical. Other times, it’s best to keep the other party on the hook. Knowing which strategy to employ is crucial in negotiations.

    3. Objectivity is a must
    As a professional real estate negotiator, your RE/MAX Agent is able to control the process without being affected by the emotions that swirl around real estate transactions for buyers and sellers. Among other potentially expensive missteps, inexperienced negotiators can reveal too much info to the other party, especially during intense, fast-moving negotiations.

    4. What to ask for
    If you don’t ask for something, you won’t get it. As your real estate advocate, your RE/MAX Agent will know how to ask for things like concessions and repairs in a manner that’s most appealing to the other party.

    Selling your bike online? Go forth and make a killer deal on that two-wheeler. But when it comes to buying or selling your home, stick with a professional. Real estate negotiation is no place for training wheels.

    Find an experienced RE/MAX Agent here.

    RE/MAX Nexus Realty Agent : O: 1.868.221.5468  |  C: 1.868.313.6001

    Source: http://blog.remax.com/5-things-your-agent-knows-about-negotiation-1869061305.html

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