Bank Owned Homes- What you don’t know can hurt you!

I was out with a buyer this afternoon showing a few bank owned properties. It seems most buyers are wanting ‘a deal’ these days. One of the houses we looked at was in a well established, and (for the most part) stable neighborhood in Oro Valley. Why was this house so cheap? There is another house that is the same floor plan just around the block listed for $110,000 more. At the same time, it was puzzling to my buyer and I how this house could have sat on the market for five months without selling at the seemingly low price it was listed for.  A mystery, indeed…

The troubling thing about bank owned homes is that they are a mystery. They are sold with no disclosures, as the seller (the bank) claims to have no knowledge about the property, and the previous owner is long gone. In this specific case, it appeared that someone may have made an effort to cover up potential issues with the home, namely mold… The house had a basement (rare in Tucson), and when my client and I were looking in the basement bedroom, we noticed an overwhelming moldy smell. I could see paint covering circular spores. The window had extreme signs of water damage. The carpet appeared brand new. The baseboards were missing, and there appeared to be water damage all over one wall. Not only did it smell moldy, but after 10 minutes in the house, we were all feeling a bit queasy. I left with a headache, and on the way back to my office, I felt dizzy and short of breath. Not exactly living conditions you’d want to subject your family to! If after 10 minutes in the house we all felt that way, imagine how bad it would be to live there. Mold is often a hidden health issue.  See this link from the EPA for more.

The bottom line for buyers is that bank owned homes can be like peeling an onion. You don’t know how many layers of damage there are! Considering the lack of facts and disclosures associated with bank owned homes, it is imperative to procure the services of a good home inspector. Get an inspector who is ASHI certified, and one who will take pictures of suspected issues the home has. Since most bank owned homes are sold in “as is, where is condition,” if you are considering purchasing a bank owned home, in addition to having the house examined from head to toe, you will need to get several bids from licensed contractors for necessary repairs prior to buying the house. Remember the old saying, “Caveat emptor.” This rings true with bank owned homes. Let the buyer beware! The issues of this house will be your issues if you buy it!

Here is a link to an article about bank owned homes with mold. http://ezinearticles.com/?Buying-a-Bank-Owned-Mold-House?-Think-You-Can-Handle-the-Clean-Up?-Beware-Even–The-Pros-Screw-Up!&id=1885445 Make sure you have an idea what you are getting into before you complete a purchase of a bank owned property. If you need the services of a qualified, professional Realtor- please don’t hesitate to contact Sarah Ley.