Bahamas Real Estate Agent Shares the Real Cost of Owning a Fixer-Upper
Bahamas real estate agent Rachel Pinder shares with buyers how to factor in the real cost of investing in a fixer-upper and how to know when to back out of the deal or pull the trigger.
"Finding a home that needs a little TLC in a nice neighborhood under your budget is a hard opportunity to pass on," said the Bahamas rental property professional. "However there is a lot of financial risk involved in renovating a home, which is why it is important to speak with a professional before closing the deal."
Working with a team of Bahamas real estate professionals can give buyers the peace of mind they need to either pull the trigger or pass. Real estate agents can arrange for experts to come to the property to help assess how much repair is needed and at what price.
Tackling projects aloneMany home repair projects can cost more than the buyer bargained for and can take longer than expected. Unfortunately, even buyers with the best intentions can produce results that look less than professional. Simple projects like painting, changing hardware and adding new lighting are good projects for homeowners. Major projects such as installing new air conditioning, electrical wiring or flooring are best left to the professionals.
"Many buyers assume they can learn the tools of the trade on the Internet or as they go, but this is where disaster can happen," said Pinder. "Hiring a professional means everything is in their hands and if you're not happy with the results they will come back until you are."
Add renovations and repairs into the offerBefore making an offer on the home, have a contractor come to the home to give the buyer an estimate of how much the repairs will cost. If the buyer elects to do it on their own, they need to make a supply list so they have a rough idea of their out of pocket cost. When a buyer takes these factors into account, they can make an offer they are more comfortable with.
Estimate financingUnless the seller agrees to pay closing costs, buyer will need money for that, a down payment and the repairs. Buyers should get pre-approved and keep the cost of repairs in mind when heading to the finance table. If the numbers are too high, try making a list of immediate needs and long-term goals for the home. Most importantly, don't overextend yourself, said Pinder. If the upfront cost is more than the buyer bargained for its not too late to walk away.
Research comparable homesHave the realtor look up what the fair market value of the property is (what the home would be worth if it were in good condition) then subtract the repair and renovation costs.
"A professional inspection is the best way to know whether a home is right for you," said the condos for sale in the Bahamas provider. "Sometimes the house may look good on the surface, but the inspector finds that underneath there are thousands of dollars are needed in repairs."
Including an inspection contingency into the offer will allow the buyer to ask the seller to either make repairs or give them cash at closing to pay for the repairs.
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