Do you understand what TLC means in home buying?

By John Costigan

Meaning of a TLC home

TLC is the acronym for tender, loving and care. The term sounds contradictory when it comes to real estate. I t is a term that realtor and especially sellers use to explain to the buyer that it require some touches here and there. TLC can be a good thing and at the same time a word that indicates that the house is totally messy and needs repairs that could end up very expensive. In some instances it enables the buyer to get the house in a cheaper price and also get to customize the house in way that the buyer finds best. Other instances require a buyer to invest a lot of time, money and hard work in TLC homes which end up frustrating the buyer, especially in areas where a home is bought with a lot of problem such as broken plumbing system, stained carpets, worn out paints and other issues associated with buying a house.

Buyers are always encouraged to have an experienced home inspector who will be able to detected serious problems that may be invisible. With such experts one can determine if buying a TLC home is a good deal or a bad one. It is best to back out when the home in question requires numerous amounts of money to repair and have new installations.

Pros of buying a TLC home

Buying a home that requires TLC is a good idea especially when a buyer is ready to make some installation and repairs. Such home sell for up to 10% less than the amount the seller intends to sell the property at. Buying the home cheaper automates that the money saved in home buying process can be used to customize the home according to on desire by for instance painting the color of choice and installing the floor of choice. Buying a cheaper home also dictates les money on property taxes.

Investors prefer to buy such homes, make some amendments and up grading making it a ready to move in. The buyer can then choose whether to be a landlord or sell out the property making profit. Other prefer to buying of TLC homes and repair the home slowly as they reside in the area.

It is also key to note that one can buy a TLC home and by making adjustments required they are able to add on the home’s value.

Consideration in buying a TLC home

Buying a TLC home has its advantages and disadvantages. Some of the demerits incurred are that buying a home that requires tender loving and care is that it may end up a very expensive process. Especially in instances where one does not involve a home inspector or the home inspector does not identify major problem making the buyer to have an incorrect budget.

It has disadvantages when an individual needs a house quickly but cannot move in immediately due to its condition. Duration of repairs vary from a few day to several months depending on the extent of damage of property. Buyers of TLC home also need to know whether or not to involve a contractor in the whole process. If the repairs take a longer time than the expected time required, it can cause stress to the family.

It is unfortunate when one an individual buys a home but suddenly loses interest on the property or finds no value in repairing the home. It then leads the buyer or sells the house again at much lower prices. For example an individual might buy a home and start repairing but before completion realize that the home will not have any more value. At such a point the person will have wasted a lot of money in acquiring the building permits, appraisal and loans to pay. It thus advisable not to buy a home that is completely wrecked out.

How to bid for a TLC home

Find out the home value of homes in the neighborhood already sold out. That being the first step that is involved, one find out the amount of money the buyer will save if they decide to buy the home and also if they home being a TLC is priced fairly or should the prices be further reduced.

The second step is to find out the amount of money that will be spending in repairing the home. Buyers should bear in mind that they should only spend 2% to 5% in the home purchase on renovations but with major repairs the cost could rise up to 10%.

The last step in determining the amount of, money to be spend in the home buying process 5o subtract the amount that will be spent on repairs from the estimated home value of the ready to move in homes. The value that one will get is the one that should be the home price of a TLC home. It is however difficult for the prices to be exactly the same but one gets the correct range to work with.

With that in mind a buyer is wise enough to determine whether purchasing a TLC home is worth to consider. When choosing becomes difficult buyers are encouraged to seek help from professional realtors and come up with a fruitful solution.