real estate

Take care when buying house to renovate it

Estimate the price tag
Estimate the price tag © Goodluz/Shutterstock.com

Estimate the price tag

All but deep-pocketed buyers will need a loan to both purchase and remodel.

With a mortgage preapproval, a lender examines a borrower's income and other factors to determine the maximum loan amount. The process is no different when the mortgage will include renovation money, explains Steve Marshall, renovation lending director for HomeBridge Financial Services.

An architect may charge an hourly fee to determine the cost and feasibility, Andreozzi says. If it's a simple project, it's quick to size up. "Other times the solution is much more complex and needs to be solved on the drawing board before you understand the implication on the budget," he says.

Careful estimates can come within 5 percent of the final figure, Andreozzi says.

It helps when price comes first

Detail ensures accuracy, agrees Tom Hawks, owner of Total Home Solution in Cedars, Pennsylvania. He likes to "work backwards," using the dollar amount for the remodel. Then the buyer chooses design and materials within the budget.

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