Unless you have been under a rock for the past 2 to 3 years, you most likely have heard that the housing market has hit a bit of a slump. As a result, many areas of the country have seen a tremendous increase in the number of foreclosures and short sales. This has brought the cost of housing down to a somewhat manageable area for many people and young families are finding themselves in a position to realize their piece of the American dream. The problem is, many people do not recognize the value of a home inspection on a foreclosed property.
In one instance, a friend of mine had put an offer on the house and refused an inspection because her agent told her that, since it is bank owned and the bank has stipulated that the sale is "as is" the extra few hundred dollars for an inspection would be a waste of money. After she had signed all of the paperwork, and about 2 weeks before the scheduled closing, she decided to call me for an inspection. There was significant water damage in the basement and attic, suspected mold growth which could lead to respiratory and other health related conditions. While the realtor was reluctant to recognize this as an issue, her attorney contacted the bank and negotiated several thousand dollars off of the purchase price in order to deal with the mold.
Another instance that I recently experienced, the buyer called me to do the inspection 2 days after he closed on the property. His logic was similar, since it ws bank owned and sold as is, he was reluctant to spend any money on an inspection. I am not sure why he called me at all, I guess he needed some advice on what to do to repair and maintain the property. This house was 120 years old and still has the original boiler, although it had been converted from coal to oil. It is still working, but will be susceptible to high maintenance and fuel costs. Previous owners had attempted to finish the basement by adding a bathroom and extra bedrooms, but much of the plumbing was not done by a professional and may be unsafe and very costly to repair. In order to access the pipes, much of the finished construction will need to be destroyed. In the electrical panel, there were at least 3 wires that overheated to the point where the insulated had melted and they were fused together, more do it yourself workmanship. To top it all off, the roof shingles are badly deteriorated and will need to be replaced soon. These are 4 major issues that could each cost thousands of dollars to repair, none of which he had expected. I have to wonder if the house still looks as attractive after my assesment.
Bottom line is this, if you are planning to invest in a bank owned property, for a few hours and a few hundred dollars, your home inspector can be your best friend.
American Bulldog Home Inspection
Watchdog for the American Dream