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All Foreclosed Homes Need a Professional Inspection

BYRON DUERKSEN, ACI, CMI, MCI
CERTIFIED MASTER INSPECTOR AND THERMOGRAPHER
707.245.7545 (cell) or 707.355.9067 (office) 
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A FORECLOSED HOME REQUIRES A PROFESSIONAL HOME INSPECTION

I specialize in foreclosed home inspections and in FHA 203k inspections.

Foreclosed, abandoned, and sabotaged houses can have huge safety issues.  Many realtors and prospective home buyers feel there is no reason to get a home inspection on a foreclosure.  That mistake could turn a bargain into a money pit.  You may save tens of thousands of dollars picking up a foreclosure only to find that after escrow closes there are tens of thousands of dollars in repairs needed that you did not see or anticipate.  Overlooked items could also threaten your family's health and life.  This is no place to cut corners.


Byron Duerksen, Master Certified Inspector, just returned from the A.I.I. Spring 2011 Conference in Reno where he taught a class on inspecting foreclosed homes to inspectors from six western states.


Buyers should make sure to get inspections of so-called “as is” properties, such as those purchased through foreclosure. If a home is sold “as is,” the seller doesn't have to disclose anything as he probably doesn't know and does not warranty the condition of the property.  You don't know what ‘AS IS' is.

 Many real estate agents who don't like bargaining with banks are advising clients that home inspections are of no value as a bargaining tool, since banks don't negotiate on "as is" properties.  As an added disincentive, banks selling properties "as is" have no legal responsibility for any lurking defect.  While the agent's advice to forgo an inspection as a means to negotiate on the price may be logical, it is startlingly counter-intuitive, and possibly even negligent.  Would you buy a car without knowing whether it has a transmission?  The premise holds true for a house, regardless of whether you intend to live in it, or fix it and flip it.  The Realtor may be trying to salvage a deal that could possibly be crapped if an inspector uncovers damage that the bank is unwilling to pay for, or you, as the buyer, have to realize that the agent's advice is not in your best interest.  In this case, they are putting you at risk in order to ensure they get their commission.

 TIPS FOR PURCHASING A FORECLOSURE

    • Invest time in research and preparation. Those new to the field should spend some time learning the variables of foreclosure investing before making any purchases.Budget carefully to prepare for the unexpected. The house may require unforeseen repairs, such as a leaky roof or unstable deck. The price tag of the home itself is often just the first of a series of fees. What if you planned on rental cash flow to cover the mortgage, but you can’t find a tenant?
    • Avoid buying a foreclosure sight-unseen. Try to see the house yourself before buying it, or hire someone to evaluate at it in your absence. Distant investors are buying up properties unseen in bulk, and they’re often unpleasantly surprised at how much they’ve been misled.
    • Evaluate the neighborhood. If the foreclosure is rife with problems, but it’s in a desirable area with high property resale values, it may still be worth it to make a low offer. An area with several foreclosures or a high crime rate can undermine an otherwise good deal, however.
    • Consider how long the house has been vacant. Building damage – and the costs required to make the house livable - generally increases with the time that has lapsed since the last tenant vacated. Pests are a particular issue in houses that have been empty for a long time, and plumbing defects and leaks increase in likelihood in such homes, as well.
    • Examine the landscaping. Left unchecked, trees can send their roots into the foundation, and vines can creep into the windows.
    • Has the house been professionally inspected by a Certified Inspector who is a member of A.I.I., ASHI, or NACHI? Foreclosures can be notorious for damage suffered at the hands of past tenants, through both inadvertent and intentional vandalism and theft.
    There are a number of ways to go about buying a foreclosed home, and buyers should exercise patience, persistence and careful planning before buying foreclosed properties.
     

Check out this video:  http://www.youtube.com/user/fiercefreeleancer

1.  DECKS CAUSE MORE INJURIES AND LOSS OF LIFE THAN ANY OTHER PART OF THE HOME STRUCTURE. 

2.  THE AVAILABILITY OF OUTSIDE COMBUSTION AIR AND VENTING SYSTEMS IS EXTREMELY IMPORTANT. ALTHOUGH HVAC UNITS AND WATER HEATERS ARE VITAL TO YOUR COMFORT, THEY ARE ALSO POTENTIALLY LETHAL.

3.  CARBON MONOXIDE IS THE NUMBER ONE CAUSE OF ACCIDENTAL POISONING IN THE U.S.

4.  I FREQUENTLY FIND ARCING WIRES, CHARRING OF BREAKERS AND FAULTY GROUNDS. THESE ARE SERIOUS SAFETY HAZARDS. 

Know exactly what you are buying.  A foreclosed home is more likely to have major issues than one that is occupied when you view it.  Often the house has been neglected for some time prior to the foreclosure as families with financial troubles seldom address needed reairs with the house that they are not going to keep or cannot afford.  The evicted resident often strips many appliances and items of value to either take with them or sell for needed cash.  They are the angry losers of their home who choose to alter wiring, remove circuit breakers and cause dangerous situations for anyone taking over "their home."  Broken plumbing is quite common.  HVAC systems under the house or in the attic vanish as do water heaters.  Once the house is vacant, vandals and thieves move in and gut the house in just a few hours.

I inspected a foreclosed home, four years old, upscale, beautifully appointed, that visually looked adequate and unremarkable, but when the water to the house was turned on water poured from more than a dozen ceiling light fixtures.  Ultimately wet insulation was removed, sheetrock replaced and repaired and some hardwood flooring had to be replaced.  Fortunately with my subsequent letters, the buyer was able to get the bank to foot the bill before he would close escrow.
 
In another foreclosed home I inspected, when viewing the crawl space, I discovered that venting of furnace and water heater appeared to be deliberately altered and would have created a carbon monoxide leak.  This could have proven deadly to new owners had it not been discovered and reported.

I found concrete poured down an upstairs toilet to clog the drain and septic system.  In still another foreclosed home, tampering of electrical systems could have burned the house down.  The list of the many dmages goes on and on.

Crawl spaces can reveal bad foundations, damaged duct work, sagging or broken support beams and posts, mold, water damage and shifting supports.  On occassion wild life has moved in.  The attic can have many of the same issues. 

Not all issues with a roof and its metal components are seen from the ground by the Realtor and prospective buyer.  If at all possible,  an inspector must get on the roof and walk upon it to assess it.

Always remember that what you don't see can be lethal, expensive or just heartbreaking. 
 

SPRING VALLEY HOME INSPECTION
Upon arrival at this home the neighbor dropped over to inform me that the previous occupant who had built the home 5 years earlier had gone ballistic after moving out of the home.  A chain saw had cut up the front porch stair railing, the front yard fence and sawed off the large TREX deck in the rear with much of it removed from the property.  Upon entering to do the home inspection it was observed that every sheet rock wall had large holes, every interior door had been removed and the lower kitchen cabinets and all appliances were ripped out.  The furnace controls were removed and the wiring cut.  The jetted tub in the bathroom had a large hole punched in it and major portions of the  surrounding tile was broken.

Exterior lights on the house and the detached garage were missing, open ended live wires were observed and the power garage door opener was destroyed as was the rear entry door.  Every few feet the garage wiring had been cut in two.  There were many more items of damage but this tells enough of the story to show there are angry people who have lost their homes to foreclosure.

 


AN ANGRY KELSEYVILLE RESIDENT DISPLAYS FEELINGS
Upon arrival at a home with a lake view to die for,  Home Inspector, Byron Duerksen, viewed major damage which appeared to be deliberate.  Not only was there a very unacceptable remark painted over the garage door, the lower level of the home had experienced a flood which was caused by hot shower water spraying on a bathroom wall for what may have been weeks.  Not only was the wall damaged, the floors on that entire level had been soaked, carpets destroyed, walls had wicked water up the sheetrock which had then caused mold,  the water had also soaked through the floors to the area under the home. 




Upon walking into the area under the entire house, rotting floors, floor joist and beams were observed.  Because of the extensive inspection and report, the Realtor with the buyer, was able to negotiate a $50,000 repair which was paid by the bank who owned the home. 

This home inspector has found major damage to be fairly common when inspecting foreclosed properties.  On more than one occassion the report has helped the buyer get a price adjustment or repairs of the damage.

Obviously not having an extensive home inspection on a foreclosed property is not only unwise. it can be life changing.

Call Housecheck Inspections to inspect your foreclosure purchase for your own peace of mind.

NEVER BUY WITHOUT A PROFESSIONAL HOME INSPECTION.