How To Negotiate An Offer On And Buy A Fixer-Upper Home

Posted on: 8 December 2018

A home is going to be one of your largest purchases during your lifetime, but it is an important and necessary one, so you want to get the best deal possible on the home you buy. Buying a home that needs a lot of repairs is a good way to get into a home with low upfront costs, and you can complete repairs on your own or with the help of other friends and professional contractors to make it your dream home. Here are some tips to help you negotiate a purchase for a fixer-upper home so you can move in and get busy on its repairs to make it the home you want.

Utilize Your Realtor

As a first step, you should talk to your realtor to find out what a home's value is based on the market trends and recent sales. Your realtor can find the value of a home for sale by comparing it to similar home sales in the area.

This process of comparative market analysis will only take your agent a few minutes, but it gives you a realistic starting point to base your offer price on the home that you want to buy and fix up. This will also give you an indication of how much the home's value can increase to once you fix it up with necessary repairs.

Do Some Research

Now you will need to adjust the home's value and your offer price according to its required repairs. You can do this do by subtracting the cost of repairs from the home's potential value. Get some free quotes with local contractors for the work needing to be done. For example, call a roofing contractor if the roof needs replacement or an electrician if the home's electrical needs updating from knob and tube. If the current fence is rotted and falling down, get a fence installation quote by a fence builder or find out the cost of materials and a post hole digger rental if you want to do the work yourself.

After you adjust the home's value based on its necessary repairs, your realtor can then help you write up your offer to buy your new fixer-upper home. You can include details of the needed estimates for repairs in your offer to help strengthen it. They will also help you in submitting the offer and responding to any counteroffers in a timely manner so you can finalize the process.

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