Wednesday, November 19, 2008

5 Problems to Check for Before Buying a Foreclosed Home

Hundreds of families, and real estate investors, are purchasing more and more foreclosed homes as they can typically be purchased for a fraction of their value. However, you want to make sure to pay close attention to the following 5 potential problems thanks to Popular Mechanics.


These organisms love water—so they love humid places like Florida, says Lee County property inspector and field services supervisor John Heaphy. Lee Country, home to Ft. Myers, has been one of the three counties in the U.S. hardest hit by foreclosures after the housing market collapse. When he goes in to inspect those homes, Heaphy said, mold is the number one enemy he finds. "We see walls black from ceiling to floor with mold."

Foreclosed or not, mold affects homes in muggy Florida or even arid Arizona, Grant said, though it is less common or severe in the desert. And not all mold cases are as drastic as the whole-wall growths in Florida. Sometimes, Grant said, the problem is hidden behind a wall or has just begun—that's why inspectors are so preoccupied with looking for leaks, the source of most mold infiltrations. Once mold takes hold on drywall, Heaphy said, there's usually no hope to slow it down; the new buyer would have to replace all the infested drywall.


One of the reasons mold is such a problem in Florida foreclosures, Heaphy said, is that vandals steal air conditioning units so they can sell the copper tubing for scrap. With no air conditioning to keep down the humidity (and a gaping hole letting in humid air), mold flourishes. A/C window units aren't the only target, Lee County property inspector Ken Wilkinson said—thieves would grab dishwashers and other large appliances before banks and realtors got smart and pulled those expensive items out of unoccupied homes. Piping and electrical wire are also popular targets, according to realtor Jeff Staub, who works in foreclosure-ridden Riverside, Calif.

Abandoned homes are ripe for random acts of vandalism as well. But, Heaphy said, some of the worst damage comes from the former homeowners, who deface their own house when they know they're going to lose it. Grant has seen the same thing—some people trash the house, or even punch holes in the walls. Staub said he once entered a home in which someone had taken a baseball bat to the walls. But what may have shocked him more, he said, was the time he entered a house where the old owners had left their home perfectly clean, even vacuuming the floors on their way out. "You never know what you're going to see when you walk through that door," he said.


Besides damaging the house in frustration, Grant said, some foreclosed homeowners try to take whatever they can along with them. He said that he and other inspectors have gone into houses where the former owners grabbed anything they could get loose—light fixtures, ceiling fans, even kitchen cabinets and entire toilets taken from the house. Staub said he found a foreclosure where the former owners had ripped out all the carpeting. And while some foreclosed homeowners loot their own home, Riverside, Calif., realtor Mike Novak-Smith told PM they often leave things behind, too—usually lots of trash and junk. So if you're looking for a foreclosed home, anticipate that extra costs for appliance replacement or trash removal might cut into the savings from buying an inexpensive property.


Nature abhors a vacuum, and often wild animals will find an abandoned house and make it their home. Heaphy said that all kinds of Florida wildlife like to take over in the absence of a homeowner—when the grass gets hip-high at an abandoned house, it's a haven for snakes. And he and his agents have stumbled into other animals, including panthers and wild boars. Typically, Heaphy said, those big mammals are more scared of us than we of them, but that's not always the case. "If you find a mother boar with piglets, you don't want to get in her way," he said.

Grant said he'd seen hundreds of bats in an attic before, and a beehive so well developed that honey was dripping off and coming out of the bottom of a wall. Inspectors in Arizona sometimes run into skunks living in ventilation systems. He said probably not all of those instances happened in foreclosures, but they show how a neglected home can become host to just about anything. You can get rid of larger mammals, Heaphy said, at least once you get over the shock of finding a panther in the living room. But some infestations—like the fire ants he sees often in Florida—are harder to exterminate.


"Most maintenance stops when the payments are no longer being made," Novak-Smith told PM. Grant said people who know they're losing their house don't typically care whether they keep a fresh coat of paint on the walls or if tiny roof leaks are sealed. Mechanical systems frequently suffer in a foreclosed home because they need a fair amount of care, he said—foreclosures frequently have heating systems at the end of their lives, often prematurely so because the homeowner neglected routine maintenance, like cleaning the filters or bleeding the radiators. The ventilation systems are often forgotten, too, he said, which can lead to mold problems. Home buyers looking at foreclosures need to bear these facts in mind, Grant said—they could be inheriting a much larger and costlier repair job than they first expect.

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