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Old 05-06-2013, 04:23 PM   #1
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Do some remodeling right away. How?


My wife and I are looking into buying a house but the kitchen is super tiny and we'd like to remodel right away. If someone is shopping for a house and there's a room that they know they can make bigger, but don't have the money right away, is there something that they can do to get the sellers to support or pay for the remodeling? I know of home equity loans. Can home equity loans be taken out right away?

We basically need to knock a wall out and install more cabinets and a new stove. Just wondering if that's something that can be put into the buying terms for the sellers to do or pay for or if we'd just have to come up with the money ourselves.

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Old 05-06-2013, 08:51 PM   #2
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Do some remodeling right away. How?


Asking the seller to pay for your remodeling isn't a requirement of the sale, your best bet is if you'll really want the house is to purchase it, move in for a while and then set aside some money for the renovation or get a home equity loan after the purchase not before.

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Old 05-07-2013, 08:14 AM   #3
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Do some remodeling right away. How?


Home equity loans almost always require an appraisal, and most banks won't offer 100% Loan to value, usually up to 90%, and the lower it is the better the interest rate. When you buy your house you'll be getting an appraisal and that will let you know if you're in the ballpark. For example, if your offer of $150,000 is accepted, and the appraisal comes in at $175,000, that would give you confidence that a home equity loan would be plausible, but an appraisal that far from the accepted price would often scuttle a deal.

You could also just hope that the shocked real estate market could lead to divergent appraisals, it does here, but it's a bit unlikely. I don't see your location listed so I can't even guess at that. But if your appraisal is close to the settled price, the odds that a new appraisal within a year would go up more than 10% are a bit low. Ours did, but we had a foreclosure and some special situations.

You can also get straight up home improvement loans, not home equity loans, that aren't based on the value of your house. The interest rates are usually a bit higher, more like 7-9% instead of the 6-7% you get on a home equity. But it would be an option. I actually replaced a roof with a home improvement loan from my credit union. I think it's 7% on 7k over 4 years.

If you're paying pros to do it, a lot of contractors will do financing for you. Often times it's not bad, 18 months same as cash, or 5 years of no interest. There are many banks who specialize in offering financing to the customers of contractors. Enerbank is one that my siding contractor uses, tho we aren't using it.

The odds of a seller doing this are very low.

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Old 05-07-2013, 08:57 AM   #4
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Do some remodeling right away. How?


There is no way as a seller that I'd ever agree to something like what you're asking. In fact, the last several houses I've owned were sold "as is." The only exception was one where the buyer's inspector pointed out a minor plumbing code violation, which I fixed.

You sound like me and my wife. Unlike most people, we never expected a house we were interested in to be "perfect" except the two or three we owned that were new construction. If we generally liked a house, but a bit of remodeling would be needed, that was fine with us. One older home even had blatant electrical code violations which I knew I could fix. Often times, things like that can be the basis for negotiating a lower price.

We have owned ten houses over the years, and did some amount of remodeling to all of them. Probably the biggest example is our current house, a log home the two of us designed and built almost entirely by ourselves. During the interior framing phase, the wife decided to completely change the layout of the loft area (tv room, master bedroom, walk-in closet, and bathroom). She also decided to replace the stairs with a circular staircase. So, in essence, we remodeled the place before we finished building it!

As someone who lived for over a year with a gutted kitchen, I advise you buy the house if you want it, but hold off on the kitchen renovation until you have the money to hire it done, or the time, money, and skill set to do it yourselves. If you have a garage or storage building, you can begin accumulating the materials a little at a time.

Last edited by md2lgyk; 05-07-2013 at 09:02 AM.
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Old 05-07-2013, 09:09 AM   #5
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Do some remodeling right away. How?


Robin....your getting some good advise above.

I think one of the biggest mistakes new homeowners do is to start making a bunch of changes before or right after they move in.

Move in...live it for awhile...then figure out what you really want to do. AMHIK.

Our house was a fixer upper...we never used the kitchen....2 weeks after moving in we gutted it...for six months our kitchen consisted of a table, Microwave, George Foreman Grill and hot water kettle...the kitchen came out great...but in retrospect, there are a couple of things we should have done different...like take out part of a wall, put the fridge on the other wall....etc. Things that we are going to do pretty soon.

Take your time....save some money....learn from the experts here...have fun
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Old 05-07-2013, 10:40 AM   #6
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Do some remodeling right away. How?


You can always make a lower offer and see if the buyer goes for it. You will want to get an idea what renovations you want to make will cost though. Make sure you know what you are in for and how long you will be without a kitchen!

In general, I agree with the idea of living in the place for awhile unless you know for sure the kitchen is just too small. Then, I would keep shopping for something else.

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