Common Issues With REOS!
Boise REO’s are storming the market at bargain prices and consequently are being gobbled up at a rabbits pace. Even though the price is right, there are many things every investor should be on the watch for. Keep this list in mind when you are previewing REO’s in any city, but especially Boise REO’s. The first real red flag for any investor purchasing an REO property from the bank is that banks do not have any responsibility to disclose any issues with the property. Even when informed of a significant issue, like mold, the banks will tend to pretend they don’t know about it and simply pass the hot potato on to the next party. The best way to avoid this is to hire a professional home inspector and insist they test for mold while inspecting the home. The value of doing this is that the results of the home inspection can be turned in to the bank, documenting that they are informed about the issue formally, and used as a negotiating tool by the buyer.
The fact that banks do not have to reveal any particular issue with REO properties can spill into important home features like plumbing. When criminals realize that a home is abandoned or vacant they will frequently seize the opportunity to plunder it. One of the most sought after materials in any home is the copper plumbing that may be in the home’s crawl space. Vandals will enter the home with the necessary tools and simply strip and tear out all the copper fittings and piping inside the home, rendering the home virtually useless for immediate occupancy. It typically costs thousands to have the plumbing reinstalled and is more than when it is initially installed due to there being fewer obstructions at the time of construction. After the home is completed there are many more hazards and obstacles to negotiate to re-install plumbing. Vandals are only one concern relating to plumbing for REO’s. Sometimes, if the home is left vacant during the winter, the water lines will freeze and burst. The presence of water quickly ruins most modern construction materials like OSB and MDF. These engineered forms of wood are essentially small pieces of wood and sawdust glued together in a specific way to add strength, but once water is introduced the glue is weakened and the strength of the wood is compromised. Tracking down, and repairing this kind of problem can be very costly.
It is not only the plumbing that can face similar thievery. Criminals have also been known to break into homes and strip the copper conduit from the walls to turn in for money. This is not only damaging to the home, but is extremely dangerous to the criminal. In many instances prospective buyers have entered a home to find a would be vandal injured or even dead from messing with the electrical system. Again, like having the plumbing system re-installed, putting the electrical system back into an existing home is more expensive and difficult. Another electrical issue to watch out for on REO properties is that home owners are required to disclose, but banks are not due to the claim of lack of familiarity with the property. A simple home inspection, done by a professional can prevent each of these concerns from becoming a nightmare for anyone interested in purchasing Boise REO’s.
Gavin J. King is a real estate developer, builder and the designated broker of Realty In Idaho. Gavin enjoys writing articles pertaining to Boise real estate. With a broad range of experience and knowledge to draw from his products and articles are helpful and enjoyable. Gavin’s latest article will help you learn how to find Boise renters and other real estate issues.