I am beginning another series about “Things That Can Make Your Las Vegas Financed Home Purchase *Blow Up* in the Middle of a Transaction.”
My ultimate goal in this series is to make Las Vegas Home Buyers aware of the challenges of a specific home’s eligibility for financing.
Congratulations! Your lender just approved you to purchase a Las Vegas area home by looking at your check stubs, debt to income ratio and you are now approved to purchase a Las Vegas area home!
Hold the phone here, *you* may be eligible to purchase a home but is the house eligible for financing? This series is designed for you to research a home’s eligibility for financing.
DISCLOSURE: I am not a lender, title company, home inspector, contractor or appraiser. I am only speaking from personal experience by working with financed Las Vegas area home buyers. Hopefully you have hired a Las Vegas area real estate agentwho will be able to spot things that can *potentially* cause problems with your financing (mostly FHA/VA) before your contract to purchase a Las Vegas area home.
Much of Las Vegas is currently priced in fire sale status. Many times when you see unusually inexpensive homes there is a reason – they are not eligible for financing and the seller does not wish to rehabilitate the home to make it eligible for financing.
Today’s topic at hand is “Water Damage & Mold“.
Water Damage & Mold may occur for various reasons:
- A Construction Defect From a Slow Leak
- Malicious Exit From Previous Occupant
- The “Elements” or Weather
- Something “Accidental”
The effects of water damage and mold could be from deferred maintenance, recent or can occur in the middle of a transaction.
An example of deferred maintenance would be a leaky roof (weather elements) or construction defect such as an incorrectly plumbed or faulty toilet base & wax ring.
Even though we don’t have “Freezing Elements” too often here, it does happen every once in a while resulting in a cracked pipe here and there. More often than not, weather elements would be from heat & lack of utilities – baking, melting and cracking plumbed items.
Accidents do happen and some you have to wonder about bordering on being “malicious” from a former occupant. An example of this would be: a refrigerator water valve or plumbing valve left on. Water company comes to turn on water and forgets to check meter. House gets flooded. Another example would be a deep nail or screw in the wall securing something and it hits a pipe – water may pour down walls.
Many of the above examples may cause problems with lenders funding a loan. Sometimes the sellers are willing to remedy the situation, many times in the case of REO (aka BANK OWNED) – not.
A good home inspector will have a moisture meter on hand to be able to tell if a suspicious water damage or moldy area is dry or if moisture is still present and feeding the moldy source.
If your financing goes “kerplunk” due to a water damage or moldy mess, you may want to consider qualifying for an FHA 203K rehab loan!