Today's housing market presents conditions we haven't seen in years. A decade ago, abandoning a mortgage was not an option; but the dismal economy has increased the number of foreclosures and short sale opportunities nationwide. The recent recession affected every income bracket, so finding short sales/foreclosed homes in pretty good condition is not uncommon.
Foreclosed homes and short sales are no longer black-listed or taboo. They are seen as a potential investment, selling for as much as 15% below market-value! Buyers shouldn't automatically disqualify foreclosures, but they should understand how to minimize the risks and maximize their reward when weighing the options.
Minimize Your Risks
Foreclosures and short sales aren't your typical buyer/seller situation. In the case of a foreclosure, the bank sells the home "as-is". This requires the buyer to release the bank of any liability. What's the worse-case scenario? You buy a foreclosure only to discover a major problem, such as water damage that caused mold to grow. Here's how to minimize the potential before you buy:
- Have the home inspected top to bottom before getting too far along in the process. Hiring a good home inspector is a good place to start; but don't stop there:
"There are growing concerns about environmental factors - like radon, mold and lead paint - that are beyond the scope of most inspectors." says David Tamny, president of the American Society of Home Inspectors, and owner of Professional Property Inspector in Columbus.
- When a mold specialist or air duct cleaner is called into a home for an inspection/estimate, he or she might identify the source of the problem and offer remediation or cleaning options.
- HVAC contractors are a great resource because they can help potential buyers/real estate agents evaluate ventilation, air infiltration, and the general indoor air quality of the home.
- Look at the home's previous sales records. In most cases, the homeowner tried to sell once or twice before reverting to drastic measures.
- If there was ever a contract on it, chances are there might be an inspection report somewhere.
Maximize Your Reward
Look for potential value. There may be absolutely nothing wrong with the property in foreclosure or sold in a short sale. Don't expect it to be perfect or staged. Keep-in-mind that you are looking for a firm foundation and a potential diamond in the rough! Here's what to prepare for:
- Expect to see the home stripped bare
- Don't expect the bank to claim responsibility for damages/repairs
- Account for all of the 'fixes': missing fixtures, etc.
- Know that the process is highly impersonal
More info? Call AdvantaClean 877-800-2382 to schedule an appointment with a certified mold or duct specialist.