Should I Hire a Contractor and/or Appraiser?

If the property you are looking at has passed the drive-by and title search test, it is time to schedule that appointment with the trustee for a full tour. But before you do, you're going to want to hire a contractor and a home appraiser to come along with you. The contractor will often only require a nominal fee and may do estimates for free. The appraiser will cost you, but it could be an absolutely essential cost.

Here is why: Foreclosure listings often come with an estimated market value. If you contact a trustee about the property, they might tell you its market value is a certain amount. You should never go by this figure. Who knows who came up with it or their inclinations to the parties involved in the sale. The only way to be sure to get an honest assessment is to hire your own independent appraiser.

The appraiser's job is to come with you on the property tour and look over every aspect of the building. The appraiser will take everything about the property into account to give you an estimate of its market value: the condition of the property, the land it occupies, the neighborhood around it, local home values and more.

This is the price you could turn around and sell the home for in its current condition on the open market. This estimate is the touchstone for all future calculation of the property's value as a foreclosure. Keep this figure in mind at all times. It will ultimately do the most to inform you of whether or not a particular property is a good investment.

The contractor's job is also to look over every aspect of the building, but instead of appraising its value they're looking to assess potential costs associated with the home. Don't assume that the house is in perfect condition just because it doesn't appear to be in disrepair. The contractor should inspect the property's foundation, roof, condition of the floor, signs of termites or other infestations and more.

Anything that could be a potential problem or that you'd want to have fixed up to get the home into market condition should be inspected by the contractor. The estimate the contractor provides you with is the total cost you're going to incur for necessary repairs or renovations after you buy the property. Keep this figure in mind at all times.

The estimate you receive from the contractor is how much you're going to have to spend after you purchase the property. Even if you anticipated making repairs, hiring a contractor could reveal that the needed repairs are beyond your budget. This is why it's important to have the house inspected by a contractor and appraiser if you have time before the sale.

The expense of hiring these professional may pale in comparison to what you'd be pay to get the house in market condition or lose if you overpaid for the property. They may be able to find problems you missed in your own investigation of the home.