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Ask the Expert: Short and Foreclosure Sale Advice

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Are you working with clients purchasing a short sale or foreclosure? David R. Leopold, Owner of Pillar to Post Home Inspection in Fairfield County, Conn., gives us insight into handling these situations.

Q: What advice should I give clients when purchasing a short sale or foreclosure?

A: Start by telling your clients two things: 1) a professional home inspection is recommended, and 2) don’t rush the process. If the transaction timing doesn’t allow it, move on to the next house.

Buyers get so overwhelmed by the emotional aspect of the purchase that they sometimes check their good sense at the front door, which is why a professional home inspector should be consulted.

Many bank-owned properties force homeowners to view the property without utilities in service, which is a waste of time and money. It’s also incredibly risky for the potential buyer. There are many reasons why showing a dormant house is a bad idea. If the pipes are frozen behind the walls, the buyer will never know it. If the angry former owner drilled pinholes in the supply pipes or put concrete in the drains, the buyer will never know it. With no water, home inspectors can’t tell if the boiler or water heater leak.

With no power, home inspectors can’t see or test anything. It seems obvious, but it’s a point often lost on over-eager buyers who want to rush forward with the inspection before they lose a great deal on a distressed property.

Additionally, a professional home inspector will find costly defects some would consider relatively routine. Take, for example, evidence of a buried underground oil storage tank.

Most potential homeowners also don’t have access to a moisture meter or an infrared camera. Home inspectors know how to find the saturated sheetrock walls in a basement that a desperate short-seller painted over. Beyond simple property damage and unexpected expense to waterproof a leaky basement, there may be threats to the buyer’s health, such as mold.

Home inspectors have the equipment to detect the problem and test the indoor air quality to make sure clients are safe. For example, clients may notice stains on the carpet and walls, but they haven’t been trained to recognize the remains of a drug factory.

Consider the sequence of events that takes place before a property goes into foreclosure or short sale. A buyer pays too much for a house. Like most people, they then want to make some improvements. Many are young and have relatively little home improvement experience or skills. Some are not particularly savvy when it comes to looking at a home as an investment. After over-paying for the property, they compound their mistake by over-paying for improvements. As the reality of their financial situation begins to sink in, they start taking shortcuts. Don’t subject clients to these types of properties. Be sure to recommend a home inspector so they feel safe and confident while making that emotional decision. Make sure the client knows what they are buying.

For more information, visit www.pillartopost.com.

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