This article is definitely worth reposting. Thanks, Tara!

By Tara-Nicholle Nelson,  Ask Tara @Trulia

What did Cary Grant, Tom Hanks and Richard Pryor have in common? They all  starred in hilarious movies with plots built around their money pit  homes (“Mr. Blandings Builds His Dream House” [1948], “The Money Pit” [1986] and “Moving” [1988], respectively).

But buying  a home that turns out to need much more extensive (and  expensive) repairs than originally thought is only funny in the movies. In real life, buying a money pit can nearly drive a new homeowner to lose  their mind – and their shirt.

Fortunately, there are a number of  real-life strategies that real-world buyers can act on to prevent their  own home-buying plot line from including an unfunny lemon of a home. Here are 5 of my personal favorite steps that will help you avoid  buying a money pit.

1. 1125 23rd Ave N, St Petersburg

1.  Attend Inspections. There are lots of things you can outsource and rely on your  professional representatives to do when you’re buying a home, but I’d  suggest you keep attending your home, pest and roof or other specialty  inspections on your own personal to-do list.  When you’re there in  person, the inspector is able to physically show you the items that may  need repair, and give you their professional opinion of how serious and  large needed repairs may actually be at a level of clarity a written  report may lack.

Sometimes, written inspection reports convey minor items (like reversed hot and  cold faucets) as a red-flagged health and safety issue, and more major  items (like a problematic foundation) as something that needs further  inspection.  If you are at the inspection in the flesh, you can brief  the inspector on what level of cost and effort you consider major (and  vice versa), and ask them to help you understand roughly where the  property overall and any individual repairs needed fall, from that  perspective.

2.  Read the Reports and Disclosures. Attending your inspection is just the first step. Reading the inspectors’ reports is critical to avoiding a money pit – both the reports generated by  your own inspectors, and any reports and disclosures provided to you by  the seller. Things to watch for and investigate further in the sellers’ reports and disclosures include:

  • repairs the seller completed themselves,
  • repeated repairs to the same home system,
  • water and leakage issues, and
  • any reports of non-functioning mechanical or other systems in the home.

In your inspectors’ reports, make sure to notice:

  • repair estimates they offer,
  • items that seem like they will have to be completed soon (versus upgrades you can do over the long run)
  • items that seem like they might run into big ticket dollar amounts, and
  • especially watch for any recommendations that you get a specialist to look at  something – some of the largest potential repairs are often dealt with  in this way by a general property inspector.

It behooves you to follow up on your reading of reports and disclosures by working with your agent to:

  • list your questions and concerns,
  • ask the inspector(s) and seller any follow-up questions you have,
  • obtain follow-up inspections (including obtaining an extension of your inspection contingency, if needed) and
  • obtaining reliable repair estimates.

3.  Get Multiple Repair Bids.  While your pest, roof and other inspection specialists may offer you a repair cost estimate with your report, most general property inspectors do not – many states even forbid it by law.  Money pits often occur when  buyers take a place knowing it needs what they thought was a little  work, that actually turns out to be a much more costly or involved  repair, once the actual repair contractor takes a look or starts the  work.

Avoid surprises by getting multiple repair bids from reputable contractors  while you are still within the inspection contingency time frame of your contract. These repair estimates can also provide the basis for any  renegotiation you and your agent choose to initiate with the seller for  price reduction, repairs or increased closing cost credits.

4.  Stop Overconfidence In Its Tracks.  Having managed two extensive remodeling projects myself, I can vouch – unless  you are a construction professional (and sometimes even then!), all but  the most minor home improvement or repair projects tends to take more  time and money to do yourself than you expect at the outset. (With my  own two hands, I took down wallpaper and painted a room in January of  2002, and am still experiencing symptoms of post-traumatic stress  disorder. One room, people.)

Even if you expect to cut costs by doing some work yourself, I urge you to contact and obtain bids on the repairs and upgrades you plan from  actual professionals, so you can at least be armed with the information  about what it will cost to get them done if you can’t complete them for  any reason.

5.  Prioritize Price Reductions and Credits over Seller Repairs. For the most part, I feel that buyers will select their own materials and  repair contractors with more care and are generally more deeply invested in ensuring that repairs are completed to their satisfaction than an  outgoing seller. If you are negotiating with your home’s seller over  repairs that need to happen, discuss with your agent whether it might  make sense to ask for a price reduction or a closing cost credit to  offset the cost of the repairs so you can have them completed to your  standards, and with the materials and by the contractors of your choice, after closing.

By Tara-Nicholle Nelson,  Ask Tara @Trulia