The Risks of Buying “As-Is”

When you buy a house “as-is”, that’s exactly what you get. While this may be a good opportunity to fix up a home just the way you want it, it can also mean big problems. Dean Graziosi sites the economy as one reason for many houses being sold just as they are. If you are planning to make such a purchase, it is very important you know what you’re getting into beforehand.

 

When a home is listed “as-is”, the seller is released from any liability or responsibility for the property’s condition. While buying one could mean you get the home of your dreams, the situation could very quickly turn into an all-out nightmare.

 

Before purchasing a home “as-is”, be sure to have it inspected. It is extremely important you know what you’re getting into before you ever make an offer and later sign for your new purchase. When choosing an inspector, make sure the person has been in business for many years and his or her reputation is top-rate. Otherwise, you might wind up getting the wrong information and making a bad decision as a result.

 

Knowing how the home is being sold will also help you make a decision on whether or not you should purchase it “as-is”. For example, If the sale is a real estate owned property, or REO as it is often called, this means it is a property that is owned by a bank after foreclosure has occurred. In the case of a REO, you might have a good chance of negotiating repairs. This may especially work in your favor if safety is an issue.

 

A short sale occurs when a home owner’s mortgage balance exceeds the property value. It isn’t likely repairs will be required. This is because the owner is selling it in this case and will probably need to make the sale as soon as possible and won’t have money to facilitate any repairs.

 

Often times, buyers will walk away from an “as-is” property because the work involved will be too costly. According to Dean Graziosi, “This is a smart decision, if you discover that the home is in worse condition than you originally anticipated.”

 

Once the “as-is” home has been inspected, you’ll have a better idea of any costs associated with fixing it up. You may get lucky and won’t need to do very much, but odds are, anything listed “as-is” will need quite a bit of work. If this is the case, you’ll need to make a decision. If you do not have the money or means to do the work yourself, purchasing “as-is” would definitely not be the way to go no matter how much you really want the house. On the other hand, if you have the money to hire someone to do the work for you, or if you are able to do it yourself and can afford the materials, an “as-is” property might just be right for you. Check Dean Graziosi’s website for more information on purchasing “as-is”.

PURCHASING FORECLOSED PROPERTIES TO FLIP

With the abundance of available foreclosed properties on the market, many people are considering the benefits of purchasing a foreclosed property with the intention of remodeling it and then flipping it. If you have the time and money that is required, this may be a beneficial move for you. But if you are not prepared for all of the expenses that go along with this type of project, you may want to do a bit more research before you close the deal.

Remodeling foreclosed properties in order to flip them is not as easy as it looks on TV. There are many factors to consider before attempting to flip a property. If your property does not sell right away, are you prepared to make the payments until it sells. Flipping properties requires a lot of money, if you have the extra disposable income, then flipping may right for you. But if you are not prepared to make payments until the property sells, or pay for any unexpected fixes that the property needs maybe you need to wait before taking on a project like this.

Before you begin the flipping process, it is important that you find a house that is in your price range. The next step is to come up with a budget that includes all repairs and enhancements that you plan to make to the property. When designing this budget it is important that you plan for the unexpected, after all, you never know what you will find when start knocking down walls.

If the repairs are minor and you feel that you can handle them on your own, then you should be alright; but keep in mind that unexpected problems may always come up. If you feel that you need a professional to handle all of the repairs that are needed, you will want to hire a contractor who can be trusted and gives you an estimate that you can live with. There are certain areas that will require a professional due to codes that must be met, if your electrical wiring in the house needs to be repaired then you will need to hire an electrician who is familiar with the different codes.

Once you have remodeled the house and it is ready to be listed, be prepared to wait. With the realty market in the state it currently is in there is no guarantee that your property will sell fast. If this is the case you may be required to make any mortgage payments that are due and pay any taxes come due until your property sells. If you are not living in the property it is important that you visit or have someone visit it regularly to make sure that it is being maintained and continues to appeal to prospective buyers.