Whether to buy or not...
Well, we found a house we love. It's a great house, fits our needs perfectly in terms of having a separate area for renters, great location. All the houses in the neighborhood are very nice and it's in a great area. We are fortunate to have great credit and technically shouldn't have trouble buying it. Everything's awesome on that end.
Well, it's over 100 years old, and not in a good way. We had a contractor come to look at it. Looks like there's a whole porch that needs to be fixed or removed ($5-8,000), a ton of clapboard damaged or down to the ground that needs to be replaced (expensive), new gutters, and the supporting wood posts in the basement need to be replaced with steel - jacking up the house and replacing them ($300 each, not sure total, maybe $2,000). We learned that when I noticed the ceiling in a room was sagging.
He estimated $20-30,000 just in repairs. That's on top of the work we want done (adding a bathroom, adding forced air, installing a washer/dryer, place to park.) But, knowing how repairs go, I wouldn't be surprised if we got up to $40,000 to $50,000. I think the best we could do would be to budget $50,000 for the whole project.
The assessment is $215,000. The asking price is $195,000. The real estate agent doesn't think, from the *little* that he knows, that we could get less than $160,000. In terms of funding the repairs, they can't afford it, we can't afford it. In this state, they will not let us take out a mortgage for, say, $210,000 and have the sellers give us a check for $50,000. So we could possibly have a contractor agree to do the work prior to payment while the sellers lived in the house, but not many contractors would be willing to do so.
I asked the real estate agent whether, if we got the repairs done, we could sell it for $200,000. He didn't seem to think that would be any problem at all.
Of course, all of this in the context of the declining real estate market.
If we purchased this house, we would want to get the majority of this work done in the next 3 months, including:
- jacking up the ceilings, replacing wood with steel (est. $2,000)
- washer/dryer installation (maybe $2,000)
- painting a small room (can do ourselves)
- installing a bathroom ($5,000)
Things we could take care of later (next year):
- fixing clapboards (could be a ton of money)
- install forced air ($4,000 for appliance, up to $4,500 duct work)
- fixing the porch ($5,000 - $8,000)
- fixing the gutters (few hundred)
So... what would you do? Buy the house that would really work out well for us... or keep looking?