Tips for Buying a Used House

When I left the Air Force in 1987, I knew I wanted a home for me and my husband. We began looking in 1988. I found a bargain in an area of $80k homes. We made the purchase for $53.5k. It did need work, but I knew how to do most of it.

Within the first year, I invested nearly $400 into AC repairs. The unit worked for another three years; the compressor finally died. It could not be repaired. Replacing the outside compressor would not work, as the old unit was dying too. Replacement for both inside and outside units: $15k to 20k. Nuts. The ducting was substandard as well.

I used window units to cool the house during the summer; an electric fireplace heater in the winter. Both worked fine. I felt better, too.

By the time I lost my home to a refinancing scam that targeted Veterans, I had only interior painting and the floor to do. After the walls were painted, I would pour and set my own concrete tiles.

I will own my own home again. I’d like to share what I’ve learned about “fixers,” those homes owners, flippers and real estate agents tout as bargains. Some are while others definitely are not. After house-hunting with friends, learning from home inspectors and contractors, I have learned what to look for and what to run from. I have seen friends lose their life savings on dumps that first appeared to be diamonds in the rough.

To avoid getting in over your head like Mr. Blandings, or wind up in a hole with a money pit, follow these tips.

One:

Be present for the home inspection. Follow the inspector through each room and take notes. If there are any problems found that were not disclosed by the owner or real estate agent, be wary of the sale.

If the problems are not major, you could use them as bargaining points in the sale.

Two:

Be prepared to walk away from a deal. Don’t get in over your head. If the house repairs, insurance, maintenance costs or property taxes are going to cut into the budget, walk.

Three:

Only buy what you can afford. Do not be tempted to lie about your income- that’s mortgage fraud, a felony. If the seller says “go ahead- I/we won’t report you,” run. It’s your name on the loan, not someone else’s. You are the one making the payments; the lender or judge won’t accept or believe “I was told it was okay.”

Four:

Know in advance what a major repair is and what isn’t. Here are examples of minor repairs:

• · Floor tiles, carpet and other removable floor coverings.
• · Wallpaper or paint
• · Doors and windows, provided there is no wood damage inside the walls
• · Light fixtures, providing the electrical wiring is good
• · Dated countertops/appliances- either live with it and save for replacements, or budget ahead for them.

Here are examples of major repairs:

• · Roofing that includes new decking or repairs to the trusses or rafters
• · Solid wood flooring, floor joists
• · Sagging walls, windows, doors that indicate foundation problems
• · Cracked foundation or cracked basement flooring- water in the basement indicates either drainage or plumbing problems
• · HVAC or furnace/boiler replacement.

These are only examples. It is best to have a separate budget or savings account for any unforeseen repairs to the house. A good rule of thumb is to assume the worst: if the window sills are rotted, it’s a good bet the wall framing is too. If the inspector estimates the repairs are more than your budget, walk away. Never be tempted to pull money from other areas of the budget to make repairs.

Five:

Watch the newspapers, internet and auctions for houses that may be a bargain. Research the area the house is offered in. Drive to the house before deciding to buy it. Never buy an investment property “sight-unseen.”

If the property looks like it has been a crack-house or homeless flop house, the damage may be major. It may take cleaning from a licensed hazardous material removal company to make the structure safe enough just to walk into. Find out who has to pay for this first.

Six:

You can’t leave it as a fixer; city ordinances may require you to make esthetic repairs or face fines. This means the house must appear in good repair, painted and repaired from the street. Your repair budget should be enough to cover this.

You can fix the outside first and work on the inside later. Planning ahead will avoid problems such as spending the budget on a new kitchen and getting a notice to fix up the roof/siding/curb appearance and so forth.

Seven:

“I can do all the work myself,” is more often than not a statement that turns out to be those “famous last words.” I found this out myself. Fortunately, I was willing to learn fast and work hard.

Eight:

If you are tempted to buy a house from a “for-sale-by-owner” listing, insist on hiring a professional home inspector. If the seller says no, run. There are other houses for sale.

The law requires full disclosure of all the house’s problems during a sale. Hiding major problems constitutes fraud. The inspector should be licensed and inspect the house thoroughly.

A real estate lawyer should be hired as part of the sale process. This protects both the buyer and seller. He or she will ensure the state’s laws are followed in the sale. If the private seller refuses, choose another property. You don’t know what’s being hidden.

Nine:

If you have saved enough money, you may be able to buy a house outright for the amount left on a mortgage. This is tempting- but be careful. Houses in foreclosure, rental properties that still have tenants in them while the house is for sale and others may prove to be a bust instead of a bargain.

If the seller does not live in the house, ask if the house is a rental property. Don’t be afraid to ask any questions about it.

You may have to evict tenants who could be unaware the property was in foreclosure or up for sale. These tenants may or may not damage the property. A trip to the house first has been mentioned before because it will save you all kinds of trouble. You will learn if there are tenants, squatters, those trying to claim the property under state law, friends or relatives are living there.

The real estate attorney can advise you of what to do as well. You could ask the seller to take care of his or her business first as part of the sale. Any damage caused by the tenants should be paid for by the seller as a condition of the sale, for example.

Ten:

Look at the structure with truth in your eyes. In the movie, “Mr. Blandings Builds His Dream House,” Mr. Blandings, played by Cary Grant, looks at a wreck and imagines a country estate. Mrs. Blandings, played by Myrna Loy, looks at it and imagines a quaint country cottage.

He hires engineer after engineer who tells him, “tear it down.” He refuses to listen.

Don’t be Mr. Blandings. Listen to the inspector. If the house is a wreck and your budget won’t sustain a rebuild, find something else.

An investment is no good if you go broke trying to cash in on it.

Source: The author of this article has over 40 years of experience in diverse forms of DIY, home improvement and repair, crafting, designing, and building furniture, outdoor projects, RV’ing and more.