Property Conditions and Your Offer
When determining how to price your offer, it is imperative to know the condition of the property you are seeking to purchase. No one wants to buy a property, only later to discover that it requires thousands of dollars in repair costs.
To prevent this, hire a certified home inspector prior to making an offer. It will cost you a little bit of money upfront, but you could end up saving yourself much more in the long run, if the inspector finds unexpected damage you may determine not to make an offer or you know you need to adjust your offer to offset the cost of repairs. Typically, an inspection does not occur until after an offer has been accepted, but you can request the seller to allow you to have an inspection prior to making an offer. It lets the seller know you are serious and it lets you have the necessary information to structure your offer.
Work closely with a general contractor who knows the accurate costs of repair work, including both supplies and labor. You provide the contractor with a list of repairs from the inspector and then the contractor can figure the cost of all the necessary repairs. In your negotiations with the seller, you can reduce the price of your offer based on the cost of repairs. Of course, you want to lower the cost more than the repairs will actually cost you, so you come out a bit ahead in case of anything unexpected.
Also, consider the age and condition of the paint, flooring and appliances. You can lower your offering price based on those items being worn or outdated. Again, it is important for you to know the cost of replacing those items. Having new appliances for example, can really update the look in a kitchen and can increase the value of the home after you purchase it.