Save Money With an Unfinished Home

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Real Estate

There is money to be saved in the real estate market and it has nothing to do with home foreclosures. Not every home on the market was finished before the bottom fell out of the new home sales. Many builders were unable to finish their current projects before the market tanked and that left a huge inventory of homes that were in need of work before they could be move in ready. These homes are considered unfinished and that means money in your pocket.

There are several forms of unfinished home on the market today, but the start homes are the most money saving for the potential buyer. The unfinished starter home will often offer a main level that is move in ready with a second level and / or basement that have not been completed. These homes can be used as a primary residence while the remainder of the construction is completed.

Other types of homes that fit into the unfinished category include homes that have planned garages or additions that were started but not completed. If the landscaping is not finished, the home could also be listed as unfinished.

The Builder and the Unfinished Home

If the builder is still in the picture, the home could be finished according to the original plans with the purchase price being higher. The buyer could help to keep the price of the home lower by talking with the lender about the proposed upgrades on the home and cutting out some of the more expensive upgrades that are causing the price to increase. Expensive decking, landscaping and basement finishing can cause the price to jump dramatically. While the lender may not agree to all of the changes, there is no harm in asking for the bare essentials in order to keep the price low.

Lending and the Unfinished Home

When it comes to getting a mortgage for the unfinished home, the lender may require the home be mostly finished before they will honor a mortgage. This is due to the security the lender has in their ability to resell the home in the case of foreclosure. If the bank is requiring landscaping or minor repairs before the mortgage will be approved, the buyer could work with the builder to complete these items. The buyer must remember that the builder does not have the money to put into this home and is selling the home for a cheaper price because it is unfinished. This means the buyer may have to fund the repairs or landscaping in order to qualify for the mortgage.