5 steps to avoid buying a money pit(finished)


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5 steps to avoid buying a money pit(finished)

  1. 1. 5 Steps to Avoid Buying aMoney Pit
  2. 2. What did Cary Grant,Tom Hanks and RichardPryor have in common?They all starred in hilariousmovies with plots builtaround their money pit homes(“Mr. Blandings Builds His Dream House”[1948], “The Money Pit” [1986] and “Moving”[1988], respectively).
  3. 3. 1. Attend Inspections. There arelots of things you can outsourceand rely on your professionalrepresentatives to do whenyou’re buying a home, butI’d suggest you keep attending your home roofor other specialty inspections on your ownpersonal to-do list. When you’re there inperson, the inspector is able to physically showyou the items that may need repair.
  4. 4. 2. Read the Reports and Disclosures. Attendingyour inspection is just the first step. Reading theinspectors’ reports is critical to avoiding amoney pit - both the reports generated by yourown inspectors, and any reports and disclosuresprovided to you by the seller. Things to watch forand investigate further in the sellers’ reportsand disclosures include:
  5. 5. • repairs the seller completed themselves,• repeated repairs to the same home system,• water and leakage issues, and• any reports of non-functioning mechanical orother systems in the home.
  6. 6. 3. Get Multiple Repair Bids. While your roofand other inspection specialists may offer you arepair cost estimate with your report, mostgeneral property inspectors do not - many areaseven forbid it by law. Money pits often occurwhen buyers take a place knowing it needs whatthey thought was a little work, that actuallyturns out to be a much more costly.
  7. 7. 4.Stop Overconfidence In Its Tracks. Havingmanaged two extensive remodeling projectsmyself, I can vouch unless you are a constructionprofessional (and sometimes even then!), all butthe most minor home improvement or repairprojects tends to take more time and money todo yourself than you expect at the outset.
  8. 8. 5.Prioritize Price Reductions and Credits overSeller Repairs. For the most part, I feel that buyerswill select their own materials and repaircontractors with more care and are generally moredeeply invested in ensuring that repairs arecompleted to their satisfaction than an outgoingseller. If you are negotiating with your home’s sellerover repairs that need to happen, discuss with youragent whether it might make sense to ask for aprice reduction or a closing cost credit to offset thecost of the repairs so you can have them completedto your standards, and with the materials and bythe contractors of your choice, after closing.
  9. 9. How else can you avoid buying amoney pit?
  10. 10. Randy BettInvestment Realtor/Author/InvestorReal Estate Professionals Inc.Better Group Real Estate202-5403 Crowchild Trail NWCalgary, AB T3B 4Z1Phone:403-774-7464 Ext:1Fax:403-208-0082Toll Free fax:888-711-6801
  11. 11. Randy Bettwww.BetterGroupRealEstate.ca