NateLS1

iTrader: (4)

I need advice from those who have taken the plunge into buying a house.

I am looking at a foreclosed house in hyannis, ma. The price is 199,999. 2 car garage, 7/10's of an acre. It's a ranch with lots of open space and a nice back yard.

It needs work, kitchen needs to be redone, 1 bathroom needs to be redone. all windows need to be replaced, slider door, huge bay window needs replacement. The house was built in '67.

It appears there was a burst pipe and the floor was soaked. Its all wood, and you can see the wood swelled and squished against each other. It was winterized, Im thinking because the pipe burst. No one has lived there since March of 08.

It also needs a roof.

It's roughly about 50k worth of work that needs to be done. I have no problem doing it, its just the money that worries me.

Everyone I have talked to so far has said to offer no more than $130K. Am I the only one that thinks I will be laughed at if I make that low of an offer?

Slowhawk

iTrader: (12)

A house that needs to be redone is touchy.You might think it needs $50k but at the end it might cost $100k.

If your looking at a house that needs work for $199k(and alot of it by the sounds) you should just look for a house that needs no work for $250k

Also,I would advise that you think long and hard about where you want to live.Most people have a hard time breaking the tie's to there home town. Think about where you might work in the future,access to highways ect.Don't buy a house close to a job you know you will leave just because it's convenient at the time.

In my case I knew Boston is where the $$ is at so I took a Map and circled area's with a good access to Boston but far enough away not to live in a congested town.

TNTramair

iTrader: (15)

Slowhawk nailed it.

if it needs that much work offer as low as you can b/c 95% of the time then initial 50k that you thought it was gonna take to fix it up, ends up doubling or even tripling by the time your done.

stangslayer98

i would offer the 130k your friends and family are saying too, in this economy no offer will be laughed at, banks have their lending standards up the roof.......

nutiger

iTrader: (2)

What are the values of the houses in the neighborhood? I'm guessing it worth more than the price they're asking? If it needs that much work, you might want to pass or like the others have posted, lowball them!

C5042081

iTrader: (5)

if it needs as much as you say , count on 50k on the low end and possibly 100k in repairs, get estimates of the repairs and make an offer based on that, if it's what your looking for

454mag

iTrader: (17)

Don nailed it. So many houses for sale that are ready to move into. Fixer uppers are not the best deal around-- especially with water damage of unknown extent. Mold problems from the water could make the place virtually worthless. If you are serious about the house pay a pro for a thorough inspection. Make sure you find a highly recommended inspector --- most are not very thorough. Realtors are leeches -- do not be afraid to insult or offend them with lowball offers. Look at lots of houses and take your time.

7998

iTrader: (1)

X2 ,
Pipe burst? I just gutted a office building that had a pipe burst and the **** was nasty. After I pulled some trim off, mold popped up in 5 mins, 30 mins later it was black. Crazy, I wouldn't have believed it if I didn't see it myself. My point is becareful and take your time to make sure you don't screwed.

BoostedLT5

iTrader: (1)

You will need an enviromental company to go in and take care of the mold problem from the pipe. This can run you tons of money. Try calling one to get an estimate for how much it will cost if you are really serious about it. One of my customers is Belfor USA, they do a great job, they're out of Hopkinton if you want to give them a shout. Some others are Service Master and Servpro.

DannoWS6

iTrader: (5)

That's lot of work with a lot of unknowns. I looked at a bunch of forclosures recently and walked away from all of them. Unfortunately the housing market right now is saturated with foreclosures. Some might be good deals, but most are not. I 'd be carefull about that place. Plus you can offer anything you want, but the bank won't drop the price much if any unless you find more unknowns or it sits for a long time.

I think you could find a better place needing less work for closer to 250. The advice above is good. You also have to look at other things on foreclosures, like a clear title and no liens against the property. Does it pass title V or is it town water/septic?

A friend of mine bought a foreclosure last year. It needed to pretty much be flipped. Well first he fought with the bank for a few months before he even got the house. He's been making mortgage payments for 6 months and he can't even live there yet. His father is a contractor and they spend all their free time fixing up the place. He had to take out another small loan to pay for renovations as well. It's frustrating and I wouldn't even consider a place needing that much work, even if I knew what I was doing.

Good luck with the home search, there are a lot of options out there and it will still be a buyers market for some time. Consider a good realtor too, makes the process much easier.

DannoWS6

iTrader: (5)

Reminds me... I looked at this one foreclosure last year cause it was a steal, cheap, lake access, etc. It had a one car attached garage with living space above. Guess what I found in the garage floor. A SEPTIC TANK cover! Tha'ts right the septic and opening was built in to the concrete garage floor, you could even smell a faint whiff of sewage. I ran away LOL. The advertisement that was posted online for it never mentioned that stuff.

RSTEWART

Call "holmes on homes" !!

JL ws-6

iTrader: (50)

Honestly if it needs that much work I'd offer then 90 to start, and not a cent more.

What you have listed, is 100 grand worth of stuff. The kitchen alone could cost you 50 grand if you do it with all really nice stuff, with the amount of unknowns, figure at least 25 grand of other stuff you don't even know.

I bought an older house and redid alot of stuff already, and have as much left to do as I have already done. It's a good way to get started, but by the sounds of what you are looking at, unless you can get it for a real steal I wouldn't do it.

There's so many houses on the market right now, you pretty much have your pick. And believe me, there's stuff going for way less then it's worth, and I mean what it's really worth not the BS inflated prices of 2 years ago.

NateLS1

iTrader: (4)

Thanks for the advice guys. I think I will start looking off cape for a house. I didnt really like the area the house is in personally anyway, but its pretty big compared to other houses at that price.

Smaller houses with smaller yards are going for the same price if not more, so I thought it might have been a good deal.

DannoWS6

iTrader: (5)

Well there's a good reason it's priced the way it is then.

For what it's worth I was in your same shoes a few months ago. I settled for a slightly smaller home and yard and bought a new construction. My needs for the home were low upkeep, move in condition, and efficiency. Your first home typically isn't your last, but it's a good time to buy and build equity, it's a big step towards getting the home you ultimately want. Especially if you buy with intention to sell later.

I looked at many homes that needed work and for just another 25k-30k I found a a couple new constructions, that lacked some things but made up for it in the end.

Lot's of builders right now are mid project or not 100% done. Most will sell if they can get any profit, there are some good deals out there, Of course the cape is gonna be pretty expensive. Don't forget you're eligible to receive the first time homebuyer tax break this year. You can claim back up to 8,000 in tax liability over a 2yr period. It helps a lot cause you realize when you get a new place you need to get a ton of things

JL ws-6

iTrader: (50)

I agree 100% with what Danno's saying. Your first house is never your last, and get something that you can build equity into.

I bought mine in 2005, put a bunch of work and $ into it, and even with the housing market in the hole it's in I'm still not even close to being backwards on it.

BlackScreaminMachine

iTrader: (17)

I know alot about getting into rebuild projects.... what I can say is you want to make sure by the time your done that you are NOT the most expensive property on the street/neighborhood. Because that means you will be taking a bath on the selling.

If you give your self enough room, you should be fine.

Like said, 1st house 95% of the time is not your last. You want to make sure $$$ invested can at least be taken out, if not make a little $$$ off of it. Unfortunately "Sweat Equity" can never be priced or accounted for.