Inspections on Foreclosed Properties
March 2, 2010 by Admin
Filed under Stop Foreclosure Tips, Stop Foreclsoure General
Typically the lenders owning foreclosed properties have not provided potential investors with the ability to view the homes ahead of time because the home is being sold in an as-is condition. This holds true when a home is sent to auction. For investors that would like to have the best chance at receiving a full inspection prior to making an offer on a foreclosure, contacting a real estate agent experienced in selling foreclosed properties can be a major asset. Experienced agents can help guide you through the paperwork process to ensure you don’t succumb to common pitfalls.
Deciding to Use an Inspector
For any foreclosure buyer, the opportunity to use a certified home inspector prior to the purchase of the property should never be undervalued. The inspector can help to advise on issues that would cause you to lower your bid price as well as provide a report which shows the mortgage holder the extent of damage and repairs that will be required, further justifying your price. The cost of an inspector can sometimes be wound into the purchase deal with the lender, but more often it is exclusively out of the pocket of the buyer and can run about $250-500 for average, single family home dwellings.
On the surface, the property may appear to have no major issues, until the inspection is completed. A professional inspector would be able to provide advice on details such as changing the slope of the ground leading to the foundation of the house which will eliminate the leak that consistently shows up on rainy days. Otherwise as an investor with limited home evaluation experience, you might have thought you had a leak in your foundation and hired contractors for water sealing when this would in no way prevent additional issues.
Finding and Using an Inspector
One of the benefits of using a real estate agent is their industry contacts. A buyers agent typically has several preferred inspectors who can help to review your property prior to initializing a bid contract. There are many online resources to determine which contractors and real estate professionals to work with. Once you have selected the inspector, your real estate agent should coordinate the time and date of the inspection. The potential investor is typically present while the inspector reviews the property and can gain key points of information about current home issues or potential future ones as the inspector creates their report.
When the inspection is complete, a full report will be provided to the buyer who can then choose to move forward with the property purchase or rescind the offer based on the findings of the report. In some rare cases, mortgage holders who are highly interested in offloading the property may be willing to negotiate with either a lowered price or potentially repairs and improvements that are necessary to help the house come up to industry standard codes. This is not the same level of detailed repairs that can exist between a traditional home buyer and seller, but it is similar in nature based on the report findings. A mortgage lender is not typically interested in retaining a property so in the event they have an interested buyer, they can be willing to negotiate the deal.
The Consequences of No Inspection
What an inspector doesn’t guarantee, is that they have captured every flaw. A homeowner who has purchased a foreclosure that is suddenly faced with plumbing that doesn’t work right cannot take it up with the inspector. In general, a professional inspector is certified by local, state or industry guidelines and is providing a review of the safety, quality and overall condition of a property. From serious code violations to simple to fix issues, a thorough home inspector should be able to find both.
Some foreclosure buyers opt to forego an inspection because of either the cost to them personally, the time it might take that you worry will jeopardize the deal or because you believe it won’t make any difference, you want the house any way. These are very critical errors that can lead to huge headaches. If a foreclosure opportunity is available and provides the option for an inspection, a potential buyer should definitely consider the ramifications closely if they think declining will save any time or money. With a thorough inspection, the potential buyer can feel confident that they have made a wise decision in perchasing the home.
More Stop Foreclosure Tips:
I would think you want to inspect it to see not only the value of the home but also what needs to be fixed before someone can live inside.