Step #5: Condition
Believe it or not, no house is perfect. No matter what you buy, be prepared to find things that need to be fixed, adjusted, maintained, or changed. The question to keep in mind while you're shopping is this: How much fixing, adjusting, maintaining, and changing do you want to do to the house you buy?
In real estate, condition relates almost directly to price. Many condition issues are fairly common, and have fairly predictable repair costs. Furthermore, homeowners sign legally binding disclosures that make known defects a matter of record. Finally, as a buyer, you can employ an expert to inspect a house you are considering. (No, inspectors may not find everything - there still may be surprises.)
Some condition issues are relatively easy for a homeowner to correct, while some require professional attention. If you're handy with a hammer or paintbrush, you can overcome many problems that might turn off other homebuyers.
It's not unusual for you to see that the homeowner has taken care of all the simple, non-critical items - Fresh carpeting, fresh paint, perhaps new appliances. You should make sure that the work meets your standards - Some sellers have a pre-disposition to using cheap materials and doing sloppy work when they're just trying to make minor appearance improvements. Other sellers realize that they're adding to the appeal of their home in the eyes of all potential buyers, and make improvements that add real value in the market.
If you find roof leaks, furnace problems, or electrical issues, someone is going to have to pay a pro for repairs. Could be you, could be the homeowner. It's essential to have cost estimates for repairs, regardless of who will be responsible for them - Otherwise, it's impossible for you or the owner to talk realistically about a selling price for the home.
But we're getting a bit ahead of ourselves. For now, just remember that all houses have condition issues, and that dealing with them will be a part of the negotiating and pricing, should and if you you decide to make an offer.
Your Key Step - Condition:
Look for condition issues, ask about defects, and make it clear to all that condition relates directly to price.