Buying an unfinished home can be an exciting venture, allowing you to customize a space to your particular needs and liking. However, unfinished homes come with their own set of challenges and considerations.
If you're looking for an unfinished home on the market, here are five crucial things to know to avoid making a poor investment.
Be Realistic About Expectations
While the prospect of crafting your dream home from scratch is enticing, it's essential to be realistic about the time and effort involved. Unfinished homes often lack the immediate move-in appeal of fully constructed properties. In many cases, unfinished homes have no drywall, no toilet in the bathroom, or no appliances.
If you're set on buying an unfinished home, understand that the customization process takes time, and there may be unforeseen delays.
Check the Permits
Unfinished homes may not have completed all the necessary permits for construction. Some unfinished homes may also fail to meet local building codes.
Before finalizing any deal, ensure that the property has the required permits from local authorities. Lack of proper permits can lead to legal complications and may hinder your ability to make desired modifications. In addition, be sure to get a home inspection for any work completed.
Set a Budget
Unfinished homes often come with a lower upfront price, but it's crucial to set a realistic budget for completing the construction and customization. Factor in not just construction costs but also unforeseen expenses that may arise during the process.
Aside from the budget, take into consideration any potential delays to the construction, especially now when materials are in short supply and workers are in high demand.
Check Local Laws About Living in an Unfinished House
Before purchasing an unfinished home, familiarize yourself with local laws and regulations regarding living in a partially constructed property. Some areas may have restrictions on occupancy until certain construction milestones are met. Understanding these rules ensures that you're aware of any limitations on your use of the property and can plan accordingly.
Financing Unfinished Homes Can Be Tricky
Traditional mortgage lenders may be hesitant to finance an unfinished home due to the inherent risks and uncertainties. Explore financing options specifically designed for construction projects, such as construction-to-permanent loans. These loans provide funds for both the purchase of the property and the construction costs, streamlining the financing process for unfinished homes.
