Common sense... where for art thou?

Home Inspector with BC Warner Inspections

I recently had the extreme pleasure of inspecting yet another HUD home.  I jokingly call these homes "diamonds in the rough..."  Deferred maintenance issues often abound in these homes, and this particular one was no different.


Our original inspection date had been postponed due to active lead mitigation for which no one had informed me, the client, or their agent until we arrived on site to be greeted with warnings to "Stay Out" and plastic sheets everywhere.  20 minutes of phone calls by the agent determined that we would need to reschedule once clearance testing had been confirmed. 

Fast forward 2 months later...  my original client was persistent in pursing this home purchase and called to inform me that we were good to go for the inspection now.  We agree to a date and the inspection commences.  I was not disappointed with my preconceived notion of HUD homes... deferred maintenance did abound and this was going to be a lengthy report...

Among the many plumbing concerns and active leaks, ill-repaired fire damage in the basement and attics, electrical hazards throughout, and over-abundance of water intrusion and wood decay, was this furnace...furnace 


A Chrylser Airtemp which haven't been manufactured for at least the last 1/2 century.  Beyond it's obvious age was its glaringly dilapidated condition...











Scorch marks and inoperable were the least of it's worries...





The entire blower compartment was rotted beyond repair... furnace


But my client was not deterred!  With assistance from his experienced agent, he pursued the purchase.  One would say that "common sense" would scream to run away from this money pit, but everything to him was repairable.  Indeed it was! 


So where does "common sense" come into play with this story?  He was seeking a HUD loan for this HUD home... for which the loan required a functioning heat source.  Low and behold, this was the only item from over 100 identified in the report that the client and agent asked for replacement.  Seems like a common sense request to me!  But not in the eyes of HUD... for they saw it as having already invested too much in lead remediation to consider any further repairs before the sale.  But the loan requires a functioning heat source... but the house no longer has one... but the loan demands one... but we won't install one.  MADNESS!!!!  

Guess what... after all of the wait and aggravation and arguments, the deal fell through because HUD requirements couldn't come to terms with HUD requests. The home remains on the market as a rapidly deteriorating eyesore.

I know this isn't the only example of institutional failure.  Simply look at today's headlines for common sense failures of government budget deadlines... That's all I've got to say about that... (credit to Forrest Gump)

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Comments (11)

Faith LaRosse
Springer Realty Group - Limerick, PA
Serving Berks, Chester & Montgomery Counties

It is absolute madness..they tend to be able to forget that these properties are affecting real people...they are not just wood and mortar...there are real human beings planning their lives around them--madness is right. 

Jul 25, 2011 11:47 AM
Bill Warner
BC Warner Inspections - Dayton, OH
Infrared Thermal Inspector

Faith- I feel many homes could come back to life providing shelter for productive families... if it weren't for the institutional madness getting in the way.

Jul 25, 2011 11:55 AM
Ralph Janisch ABR CRS Broker
Janisch & Co. - Conroe, TX
Selling Northwest Houston to good people like you!

Stuff like that is a primary we discourage all but the most sophisticated and intrepid buyer from trying to get a HUD home.  They are never the bargain that they appear to the untrained observer.

Jul 25, 2011 02:08 PM
Bill Warner
BC Warner Inspections - Dayton, OH
Infrared Thermal Inspector

The bargain is certainly in the eye of the beholder... but this beholder says these homes are rarely much of a bargain!

Jul 25, 2011 02:48 PM
Jack Gilleland
Home Inspection and Investor Services, Clayton - Clayton, OH

It's definitely "location location location".  If the home is recoverable (very little if any structural flaws - can't need to rebuild the house) then it is a viable rehab. The question here is not how much work needs to be done, it is how much work ($) will the neighborhood support you investing.  Can a furnace and AC  (lets say 6k) be added directly to the price of the property and still make a profit.

I love doing these homes (working on my 20th now) and if you look hard and long enough there is one out there that is a win win situation.  I can resuscitate a home (and maybe help a neighborhood) and make some $ at the same time.

Jul 26, 2011 08:53 AM
Bill Warner
BC Warner Inspections - Dayton, OH
Infrared Thermal Inspector

Those are indeed viable questions which need accurate answers Jack.  There certainly are excellent investment property opportunities out there.  Finding the profitable ones is the kicker for sure.  It's easy to forget that profit is also in the eye of the beholder...

Jul 26, 2011 02:47 PM
Atlanta's Home Inspector, David Lelak IHI Home Inspections
IHI Home Inspections 404-788-2581 - Canton, GA
Experience the IHI Difference

Don't you just love it! HUD requirements and HUD requests seem to have been given a script that allows epic failure... sorry the client didn't get the "diamond in the rough"  But glad that you got to see this and share it.  ~ Jennifer the IHI Home Inspections Girl

Jul 27, 2011 05:06 AM
Jack Gilleland
Home Inspection and Investor Services, Clayton - Clayton, OH

Bill, I agree that "financial profit" is only part of the equation.

Jul 27, 2011 05:21 AM
Bill Warner
BC Warner Inspections - Dayton, OH
Infrared Thermal Inspector

David & Bonnie -  Always interesting work when inspecting these properties!


Jack -  These certainly aren't for the faint of heart.  Only experience can help one see the full equation.

Jul 27, 2011 05:27 AM
Not a real person
San Diego, CA

Happy Sunday!

Aug 13, 2011 10:29 PM
Bill Warner
BC Warner Inspections - Dayton, OH
Infrared Thermal Inspector

Thanks Russel!    You as well!

Aug 14, 2011 04:40 AM