Tuesday, April 28, 2009
Let's think about all those homes you've been looking at before making your initial offer on your final choice. Were you taking notes? Did you take pictures? Did you spend more than 15 minutes or so in the property? The answer to most of these questions is, "No"... Now comes your home inspection. He or she is spending hours going through your prospective home and finding all sorts of issues, some serious and many not so serious. You might even be thinking why didn't I see that issue when I was here before. It's a common response. Let's try to get you ahead of the curve, so to speak. Look for some basic problematic areas in any home you preview.
Water and mold damage is #1 statistically with regard to problems in REO/Foreclosure properties. This can be caused by prior plumbing leaks, roof leaks or flooding from poor drainage conditions. Take time to look in the cabinets below the kitchen sink and or bathroom areas. Many times water damage and mold growth is clearly visible in these immediate areas and may change your thoughts about the property.
Look for poor drainage conditions. Are there rain gutters? Is there a full perimeter yard area surface drainage system present? Does the grade and perimeter flat work slope away from the foundation? Again, all very easy to observe and yet can immediately notify you of possible red flags with regard to property condition and performance.
Speak to any available neighbors who might know some interesting information about the property and its condition. I hear some crazy stories from neighbors about prior crimes committed in the property, fire damage, flooding, mold issues, etc...
Again, how convenient would it be for you to have this basic information about the property condition when you're considering which property to make an offer on?
Information is empowering. Get as much of it as possible using all means available to you. Happy house hunting!
Sunday, March 29, 2009
The real estate industry transactional sales requirements and protocols in particular are changing frequently. REO's have become the predominate transaction in many areas across the country. The buyer and agent preview dozens or maybe even hundreds of properties. The buyer with assistance from their agent make an offer to purchase and are successful with bank approval. Now the fun begins. You need to perform your due diligence, including, but not limited to appraisal, physical inspection, termite inspection, geology review and or environmental inspection. You need the utilities to be active for many of the inspections to be performed correctly. But wait! the listing agent refuses to activate the electric, gas and or water services. You or your agent decide to put the services in your names and activate the utilities.
Property liability jumps to the forefront of the issues to consider. Are there known or unknown plumbing leaks, gas leaks or electrical safety issues within the vacant REO property? You're about to find out! It gets better, if the property is damaged by any of these services being activated, who do you think the bank or property owner is going to pursue damages against? You don't own the property quite yet, so your existing homeowners policy isn't going to help you.
Over the past year or so, I've been deposed as an expert witness on more than one occasion involving these issues and or scenarios. It never ends well. The party who has activated the services ends up having full or shared responsibility with regard to property damage, repair and or remediation.
On your next real estate purchase, request and insist the owner or listing agent make the property available for proper inspection including, but not limited to all utilities being active at time of inspection.