Things To Lookout For When Buying REO PropertiesPosted by Artur Ciesielski on Friday, February 3rd, 2012 at 1:59pm.
Foreclosed properties, or those now owned by the lender are still around, though not as many and most don't tend to stick around on the market once they are released for sale, which could be a few months to over a year after the house was vacated and foreclosed.
Here are a few questions to investigate about a home.
1. How old is the home. Older homes tend to have certain issues that come about as a result of age and many of these are exacerbated during the former owners distressed period. Also certain times in the real estate market, like boom times, the quality of construction and materials is usually lower. Learn about the specific issues that can come up and address them as you do your inspection.
2. Has the home been vacant for long? REO homes can be vacant for many months or some have been vacant for 1-3 years and as most of us know, vacant home tend to deteriorate faster. Be sure to talk to neighbors who may know more about how long the home's been vacant and pay more attention to some of mechanical items that degrade when not used: like galvanized pipes in historic homes or sewer pipes.
3. What is missing? Some of REO properties have been vandalized either by former owners, vagrants or others who don't respect other's property. This is common. I've seen missing pipes and discreetly removed wiring. The key word in the last sentence is discretely. Sometimes what is missing is not apparent, like when a pipe was cut in attic and when the water was turned on the kitchen flooded.
4. How does the home look? What is missing or broken. Was is the deferred maintenance. Distressed properties don't, usually, get the attention they need and when paint starts peeling or the like the deterioration speeds up.
Artur Ciesielski | 602.492.8004
Artur is a Realtor and partner with inPhoenix Realty Group and an aspiring flaneur, currently in Phoenix or elsewhere when time allows, which is rarely. You can find him running up miles on this car, cycling the urban streets, in the office on Central or working at one of the many coffee shops in Central Urban Phoenix.
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