Purchasing a home with water damage is possibly a risky investment, but understanding exactly what measures to take helps restrict your potential loss. Water damage to a home could possibly be caused by a number of distinct problems, including flooding, a burst pipe or a leaky roof. Other defects and hazards may be present in the home due to the water damage, such as unsound mold and walls, and the origin of the water damage has to be analyzed to ensure the problem won’t continue once the existing damage is addressed.
Schedule a home inspection. The extent and cause of the water damage has to be established by a professional before you consider bidding. The home inspector will notice the estimated costs to repair the damage. Ask the inspector about the expense of repairing the source of the water damage when the issue still persists. Request a copy of your home inspection report.
Speak to a contractor that has expertise in water-damage repairs. Give the contractor a copy of the home inspection. Ask the contractor about the expense of repairing the damage and cause, if appropriate, to get a second opinion. Have the contractor evaluate the home when possible. You will need permission from the homeowner in writing when the contractor has to open up any walls areas or perform intrusive tests to check for hazards relating to water damage, such as mold. Get opinions from more than one builder to guarantee the accuracy of the estimations.
Review the home inspection and contractor reports. Write the overall estimated cost to fix the water damage. Get the market value of the home by contacting local real estate agencies and requesting for revenue data for comparable houses in the area. Subtract the repair price from the house’s market value. Your bid should be about the resulting figure, but decide on a lesser bid to start negotiations with the seller.
Submit a bid to the seller. Note in writing your bid is taking the water damage under consideration. Have your real estate agent prepare the bid if you are using a broker. Negotiate with the seller and make counteroffers if needed.
Request a copy of the sales contract. Review the contract to ensure all the terms are right and any contingencies you additional, like the home being able to qualify for homeowner’s insurance, are present. Speak to an attorney to get the contract reviewed if you are unsure about any terms. Sign the contract when ready.
Apply for a mortgage if you require financing and haven’t already done so. Obtain loan quotes from multiple lenders to ensure you are receiving the best terms available to you. Pick the lender that offers you the very best terms for your mortgage you need. The U.S. Department of Housing and Urban Development provides 203(k) loans through private lenders that are specifically created for rehabilitation and purchase, so ask each lender if the 203(k) can be obtained.
Obtain homeowner’s insurance quotes. A homeowner’s insurance policy offers coverage against damage as well as other loss to the home. You may not be able to get a comprehensive policy until the water damage is fixed, but a more basic policy may be accessible in the meantime to protect your investment.
Close the deal. Once the mortgage papers are signed and the deed is registered in the county recorder’s office, the residence is legally yours. Begin water-damage fix as soon as possible before you move in. Waiting can make existing problems worse.