The benefit you will receive is based on leveraging a few key elements that buying a Home in Process provides. Understanding them is your means to success, here is what you need to know:
HIP Plan – the HIP Plan are the benefits that the Fixer is willing to offer for purchasing this home in process. The key elements are:
Days to Completion or DTC. The days to completion are the number of days remaining which the fixer has estimated it will take to complete the project.
Discount % - this can either be flat or a sliding incentive for each month that passes to project completion
Upgrades – can be a combination of structural and aesthetic changes dependent on where the project is on the DTC schedule.
How are the savings possible? Simply, the fixer saves by cutting the amount of time it takes to sell a home and the correlated carrying costs and real estate fees, consequently, they may be willing to pass those savings on to you:
Carrying costs - The fixer incurs significant costs to carry a project through to completion in addition to the typical 60-90 day period to sell a home once it is listed. These costs are things like; property taxes, utility costs and the cost of money.
Real estate fees. Traditional full fees are typically in the 5-6% points of the market sale price or After Renovation Value (ARV).
After Renovation Value (ARV). The ARV is the estimated value of the renovated home prior to completion or simply the retail sale price.
In order to bring a HIP up to today’s living standards upgrades are required. The upgrades vary and are likely to include:
Aesthetic – typically known as the finishing work of flooring type, paint, tile selection, etc.
Mechanical - are the creature comfort requirements of a home such as; Heating, ventilating and Air Conditioning (HVAC), electric, plumbing and may consider high speed access.
Structural changes. A structural change may address:
Load bearing - a simple way to remember the significance is that a “load “bearing wall is supporting the weight of the building above it: this is a big deal and may require an engineering certification.
Non-load bearing - the opposite of load bearing and is more simply accomplished without engineering consideration and costs.
Consider that dependent on the community you are searching the volume of Homes in Process may range up to and beyond 10% of the inventory of homes for sale. Many of those homes available are in need of an owner with a vision, therefore, it may be a function of our concerted effort to find what you want, for that reason :
Don’t settle – let HipHom guide you to that perfect home in a traditional neighborhood...complete with the upgrades you want
Cannot find that home? If there is something in particular that you are looking for, “Tell Us” and perhaps we can help. Our Fixers have a skill set in refreshing homes and seeking out those properties in need of an upgrade. We can work together.
Most of all...have fun!