Money Talks News: Avoiding a money pit

Money Talks News: Avoiding a money pit
(Source: Money Talks News)

Money Talks News - Buying a house in need of renovation is a great way to save money, but only if you find the right house!

"I called my realtor and just started screaming," Elisa Hernandez, first-time home buyer said. "Termites. Something we weren't expecting."

Hernandez knew she was buying a fixer-upper, but she did not expect to deal with termites.

Before you buy any house, you are hopefully going to get it inspected by a professional. But even before you pay one, there are some things to look for so that you might recognize a potential money pit.

First, if there is a basement, use it to check exposed pipes and wiring, and check the foundation for cracks.

Then go up to the top. Check the roof for signs of wear, aging and leaks. Next, look at the layout: Will it work as-is or will you need to move walls, plumbing and electrical? That is expensive stuff.

Next, look for recent repair.

"If you see anything that seems like it's brand new when the rest of the house is not, you know there was a repair," Hernandez explained. "And either it was repaired or something trying to be covered up."

Sometimes, the nose knows! Septic tank or sewer leaks, gas leaks, mold: All these things might be detectable just from the smell.

Looking good so far? Hire an inspector who has a good reputation and knows the local codes. Spending a few hundred bucks here can save you a few thousand later.

Finally, before you sign on the dotted line, make sure you are really committed. Renovations almost always take longer and cost more than you expect. Make sure to plan for that.

There is nothing wrong with a fixer-upper, if you are getting that sweat equity. But there is something wrong with buying into a money pit.

That is why you get a home inspector and why you use these tips to make sure it does not happen to you.

More ideas are waiting for you at the Money Talks News website. Just do a search for "money pit."

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