My father was a master carpenter and designer. My mother was a seamstress and tailorer. Between them, they had the abilities and talent to do almost anything, and boy did they have “vision”. With no brothers in the family, my sisters and I became the “gophers” and laborers, learning early how to hammer a nail, hold a chalk line, counter-sink a screw or wire a lamp! My folks bought the biggest, most distressed home they could find and spent over 20 years remodeling every room. One entire summer was spent with half of our bedroom wall missing and a wheelbarrow in the middle of the room. Out of the five homes I’ve purchased in my lifetime, four were severely distressed. It’s not for the faint of heart! But, lending laws and practices have changed in the last 10 to 20 years. Under today’s lending and underwriting requirements, I would not have been able to buy ANY of my distressed properties.
That doesn’t mean it can’t be done….it’s just different. And the days of buying a property with non-working components and then getting a home equity to fix it yourself are generally over!
Your lender will most likely want all the major components working and able to be turned on during an appraisal; things such as plumbing, electrical, heating. Are all the pipes hooked up? Does the roof leak? They’re not looking at what’s dated or ugly. They’re looking for functionality. If the home doesn’t meet the basics, the lender will not lend on it. But, there is hope. There most certainly are some lending programs that allow essential repairs to be done either before or after closing, but the cost of those repairs will generally be included in the loan amount and paid by the buyer. Many of these programs will not allow you to do the work yourself, but will require professional contractors or licensed workers to do the work.
So what is your distress tolerance? I toured a property once with new buyers getting ready to marry. The fiancé was a carpenter apprentice and his blushing soon-to-be bride thought he could do just about anything. When I pulled up, she announced “we’ll take it!”. We hadn’t even been inside yet! He looked slightly nervous. Upon entering the home (which was a complete wreck), Mr. Fiancé Builder turned beet red, announced he wasn’t THAT good, ran out the door and never went back in! Buyers need to sit down and discuss their tolerance level BEFORE putting distressed homes on their list of possible prospects. To some, enormous amounts of wallpaper and necessary new flooring constitutes major construction. For others, it’s moving walls, plumbing, shoring up the foundation and replacing the roof.
The level of work necessary may also delay the possession date you have in mind. Even if the home passes all inspections, are you ready to continue renting while you paint and carpet every room or are you willing to live with paint cans and plaster dust in your kitchen for a month?
If you are a seller and suspect your home may be considered “distressed”, have your REALTOR® or an objective person walk through your home and give you their “first impression” on the exterior, the entrance and every room. If your agent thinks it’s going to be a problem with potential buyers, listen to them. That’s why they are there after all, to give you an opinion on value and how to market your home successfully. Many small things that you’ve learned to live with could be relatively easy to correct/fix/repair and may be at a minimal cost. The extra work could mean thousands more in your pocket in the end.
Look at it this way…..buying a distressed property is not just a transaction, but an ADVENTURE! Go into it with realistic expectations and your eyes wide open! It’s a rewarding experience and will give you years of memories and stories to share at that next cocktail party!
As appearing in The Canton Repository 1-8-26