Is That A “Money-Pit” You Are Buying?
If you’re thinking about buying a fixer-upper and renovating it to sell it or live in it here are a few points that will help you avoid making a really bad decision.
It’s common knowledge that a totally “move-in” condition house is more expensive than a fixer-upper and offers less opportunity for growing its value – that’s why first-time homebuyers frequently opt for a fixer-upper.
A fresh coat of paint and new flooring almost always jack up the price for the buyer. Getting a great deal often means buying a house that needs a little TLC. The challenge is to find a house that is fundamentally sound but can be affordably improved in ways that increase its value, beauty and comfort.
A house with cracks in the foundation, old wiring and plumbing, inefficient heating, flood issues or toxins such as asbestos or mold could very fast become a big money pit.
A home inspection before you buy will give you a detailed report on all the issues with the house and identify all the problem areas that you will need to address. A certified inspector makes sure the hose is up to code and can point out hidden flaws in the construction.
But even before you make an offer and spend several hundred dollars for a home inspection, here are a few things you can check yourself to determine whether a fixer-upper is worth the headache.
A house should have a steel-reinforced, concrete perimeter foundation wall and footing. When viewing from the street the roof line should appear straight and not sagging or dipping in places. The exterior walls should be straight with no lean or bulge in them.
Floors should be flat, level and strong. Uneven or non-level floors – and doors that don’t swing right or fit properly in jambs – often indicate settling or other structural problems. When you gently jump up and down at the center of a large room, the floor shouldn’t feel springy. If it does, the floor joists may need additional support.
Big cracks in the foundation, V-shaped and diagonal cracks are the signs of movement or settling caused by unstable soil or drainage issues, which can be difficult to solve. Minor wall cracks at the corners above windows and doors and vertical cracks in line with wall studs are not a problem you can usually just fill and paint these.
Water can cause major damage to the house. Inspect the rain gutters and downspouts they should be carrying the water away from the house and the soil around the perimeter of the house should be graded to allow water to drain away from the house.
If the house has had drainage problems in the past, it will probably have them in the future unless the underlying causes have been handled. If it has a basement or crawlspace, look for signs of flooding, like moisture or water marks on the foundation walls.
Mold can grow in dark and damp places. Some types of mold are harmless and easily removed, while others may require expensive abatement. Professional inspection is needed for mold.
Explore whether the house is plumbed completely with copper water supply pipes. Old steel pipes become constricted with deposits, decreasing water pressure and flow.
If you can’t see new copper pipes under the floors or in the attic, you can run a test in the bathroom furthest from the water heater. Turn on the bathtub spout full-force, and then turn on the bathroom sink faucets and flush the toilet. If the bathtub spout’s flow slows considerably, the house may need to be re-piped.
Determine whether the house has an old, undersized main electrical service panel. Updating to a new service panel that can handle modern electrical needs typically costs $3,000 or more.
If the main electrical circuit breaker or fuse box panel has a capacity of less than 100 amps, it is undersized for a typical family. Also, the house should have 220-volt service.
If there are three main wires going from the utility company’s pole to the electrical “mast” on the house that serves the electrical panel, the house probably has 220-volt service. Only two wires entering the mast indicate a 110-volt service. You can also look for 220-volt outlets meant for large appliances such as an electric oven or clothes dryer.
Heating & Cooling
Check out the age and type of the heating system and whether all of the rooms are heated. If the heating system is severely out of date, replacing it will cost several thousand dollars. If you plan to install air conditioning, it would be best to do this when you replace the furnace.
Check the attic and walls for insulation. Installing more insulation in an attic isn’t normally a big job, but insulating existing walls can be costly. To see whether exterior walls are insulated, you can remove an electrical outlet cover and look next to the electrical box – be careful not to touch any bare wires or the outlet’s electrical terminals.
You can often tell if a roof leaks by checking the ceiling and the attic for water stains. Most roof repairs are inexpensive, but replacing a roof can be costly. So try to discern whether the roof will last for several years. If necessary, you can use a pair of binoculars to inspect the roof from the ground.
Asphalt fiberglass (composition) roofing is by far the most common type. When it becomes brittle and the shingles lose their mineral crystals from the surface, the roofing needs to be replaced.
Wood shingles and shakes are over-the-hill when they’re badly cupped or missing altogether. In fire-prone areas, most wood roofing is not fire-safe.
Other materials, such as tile, concrete tile, slate and fiber cement last a long time. If the roof is covered with one of these, it’s probably okay.
Architecture and Curb Appeal
Last but not least, it really helps if the house has good curb appeal that can be easily improved with a little landscaping, a new front door to make the front entry appear strong and secure. A house that has a general layout and architectural appearance that people are familiar with and prefer; like a Colonial, Split-level, Bi-level or Ranch style is easier to decorate and fetches top dollar when its time to sell.
Broker Price Opinion
A Broker Price Opinion (BPO) is sought by an asset manager or a representative of a bank or financial service organization when they want to place a monetary value on their real estate portfolio. It is similar to a comparative market analysis a real estate agent does for home owners when they are selling their house.
When doing a BPO a real estate agent compares the livable square footage of the structure, the condition, and the amenities to other similar properties within close proximity to the subject property. It also includes estimates for interior or exterior repairs, if needed, and the timeframe required to sell a like-kind property. It includes multiple pictures of the subject and the street on which it is located, as well as the pictures of all the comparative properties.
A servicer can use this data to get the market value of the property which they can use to refinance(although not legal), sell, list the property as an REO, process a foreclosure, or trade the property with other banks or entities.
This process is similar to what an appraiser does when you are buying a house and when your bank orders an appraisal. It is much quicker and less expensive for the bank to use a BPO vs an appraisal.
Real estate agents see a flood of BPO orders when the market goes south and foreclosures are on the rise. They work with multiple servicers who need BPOs completed within 24-48 hours and the ones who do a good job and give timely reports are preferred by the asset managers who in turn reward them by giving them all their REO listings.
LEHIGH Ave, Avenel, NJ 07001
Year built 1943.
1108 Sqft, Lot size: 0.11 acres
3 bed 1 bath home in Avenel, NJ. Full Basement, Partially finished. More information..
3 bedroom, 2.5 Bath Rent $2,500/month. Rent is not negotiable.
Tenant pays for all utilities, water-sewer, lawn maintenance and snow removal.
Requires 1 year lease minimum, Minimum credit score of 650,
income verification and background check.
Application link is below. Application fee $35. Call 848-391-7152 for Qs.
Click below to submit a rental Application.
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