Maryland and Virginia Real Estate and Homes Blog

FIXER UPPER IN PRINCE WILLIAM COUNTY, Virginia. SUCCESS.

FIXER UPPERS CAN BE A GOOD BUY.  Homes in need of renovation, repairs or upgrades are often priced significantly below market.  A wonderful example is a home that we recently sold in Prince William County, VA.

IT’S A WONDERFUL HOME, BUT. . . Everyone agreed that the house was surely worth the list price $200,000, and probably more.  The previous owner had started upgrades including adding a family room, new kitchen and master bath, ran out of money and the house was foreclosed.  However, our buyer wanted the house so we proceeded with a VA financed offer with the seller paying closing.  The contract was accepted and we waited for the VA appraisal.

You can see where repairs were started and not completed.  Also some upgraded windows and doors were damaged and needed to be replaced.

Upgraded window will be easy to replace.                       The house has a wonderful whirlpool bath.

VA APPRAISALS CAN BE TRICKY.  This home is a foreclosure.  The home was priced at $200,000.  The VA appraisal came in for $222,500.  Yipee!!

However, while the VA appraisal came in at $222,500, the VA appraisal was conditioned on about $15,000-$20,000 in required repairs.  Since the contract was “as is” which is routine for bank owned properties, the bank would not make the repairs and things looked bleak for our buyer.  He really wanted the home, but was not in a position to do a conventional loan.

A SUMMARY OF THE VA APPRAISER’S CONDITION STATEMENT:

Improvements - Condition of the Property

AT THE TIME OF THE INSPECTION THE SUBJECT WAS IN AVERAGE CONDITION. THE SUBJECT HAD AN ADDITION THAT CONSISTED OF A FAMILY ROOM, WITH A MASTER BEDROOM AND BATH ABOVE. THESE WERE NOT COMPLETE, THEY WERE IN NEED OF DRYWALL FINISH AND PAINT,(SEE PHOTOS) THERE WERE EXPOSED WIRES FROM FIXTURES, THE SWITCH AND PLUG COVERS WERE MISSING, MASTER BATH HAD THE VANITY MISSING. THE SAFETY RAILS ON DOORS WERE MISSING. THERE WERE NO COUNTY PERMITS VISIBLE. IT IS A REQUIREMENT OF THIS REPORT THAT THESE ITEMS BE COMPLETED, AND THAT THEY BE INSPECTED BY THE APPROPRIATE PRINCE WILLIAM COUNTY AGENCY FOR STRUCTURAL STABILITY AND CODE VIOLATIONS. THE REPORT VALUE IS MADE AS COMPLETED.

“HEY,  CHANGE THE FINANCING TO FHA (203k)?”  It seemed to me that this was a perfect property for FHA 203(k)  financing. 

MORE APPRAISALS.  So, the financing was changed to FHA 203(k).  That meant two more appraisals.  The first FHA appraisal would be for the house in it’s present condition, which came in at $220,000.  The buyer and our agent met with a General Contractor and got the price, DOM, floor plan, cost breakdown, etc. to complete the construction.  The lender ordered the second appraisal. . . . . we waited. 

THE LAST APPRAISAL.  Good News!!  The appraisal for the house after construction is $260,000. 

THAT IS THE POWER OF THE HOME IMPROVEMENT PURCHASE AND RENOVATION LOAN. 

Happy Home Buyer *  Happy Buyer’s Agent *  Happy Lender *  Happy Seller * Happy Lenn

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.

SUGGESTED LIST OF IMPROVEMENTS, UPGRADES, RENOVATIONS AND REPAIRS FOR FHA 203(k) or Conventional Home Improvement Purchase and Finance Loans. 

GENERAL, Chimney repair, Additions, Additional bath(s), Skylights, Finish attics, Finish basements, Repair termite damage, Treat termite infestations

REMODEL Bathrooms,Kitchens, replace appliances

UPDATING Exterior siding, Adding a second level, Add porch(s), Add stair railings, Attach Carport, Garage

ADD OR REPLACE SYSTEMS, Plumbing, Connect to Public Service, Heating, Air conditioning, Electrical systems, New plumbing fixtures, including whirlpool bathtubs.

WATER AND SEWER SYSTEMS, Add or replace well, Add or replace septic system (depending on lot size),

EXTERIOR, Roofing, Gutters, Downspouts, Siding.

INTERIOR, Flooring, Tiling, Carpeting.

ENERGY EFFICIENCY, Double pane windows, Insulated exterior doors, Insulation, Solar hot water systems, Caulking, Weather stripping.

LANDSCAPING, Patios and decks, Erosion control, Grading, Tree removal if safety hazard, Repair walkways, Repair driveways, Fencing (if in addition to first $5,000 minimum),

ACCESSIBILITY FEATURES, Remodel kitchens for wheelchair access, Lower kitchen cabinets, Install wider doors and ramps.

For more information, contact Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-Mail.