Great Article on Vacant Homes

Here is an article that I found on the Florida Association of Realtors website that was from the Detroit Free Press. While it mentions issues that are more relevant up north, the general idea is there. Susan and I have a lits of qualified inspectors who explain which issues are significant and which are not.

What to watch for when buying a vacant home
DETROIT – May 20, 2010 – When it comes to the housing market for foreclosures – buyer beware.

"One mistake that we see all the time is buyers going in and assuming all the mechanicals are working," said Brandon T. Johnson, president of GTJ Consulting in Roseville, Mich. "You have to be careful you don't get burned that way."

Johnson's company maintains foreclosed homes for a number of lenders, Realtors and Freddie Mac. He said the term "as is" shouldn't scare buyers off as long as they know what it means. He recommends that buyers get private inspections on houses they want to buy to avoid surprises such as missing plumbing or water damage.

Here's a list of 10 things to watch for in foreclosed or vacant homes from Ross Kollenberg, mitigation and construction manager for On-Site Specialty Cleaning & Restoration in Troy, Mich:

1. Air quality. This tells a lot about the home's condition. Include air and surface testing in your home inspection. It is a few hundred dollars well spent.

2. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This is soot damage, which requires professional cleaning, and points to a malfunctioning furnace. It also could be a tip-off that the home had a fire.

3. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.

4. An older home with extensive renovations. Check with the city for permits: You'll get remodeling details. If asbestos or lead paint is present and has been disturbed, be sure it's been remediated by a certified specialist. It the home has four or five major changes, it may not be up to code, and that could mean extensive fixes for the next owner.

5. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms); a musty odor: All indicate water damage and, potentially, the presence of moisture and mold.

6. Missing sinks, toilets and other fixtures. Sometimes the previous owner will take the fixtures with them, but won't shut off the pipes or will rip fixtures from the wall. If a pipe was cracked during the fixture removal, it could start a slow leak in the wall that isn't easily seen. Make sure those fixtures have been properly removed and not ripped from walls and floors.

7. Fungus growth inside cabinets, behind drawers and built-ins. That could mean there has been water damage. Since water falls down, look for the source above the mold. One trick inspectors use to determine whether there could be hidden water damage is to pull out the kitchen drawers and look inside to see whether the back wall has been rebuilt. If it has, that could mean water damage has been covered up.

8. Excessive painting of every nook, cranny, door and floor. The seller may be covering up mold. "When you go do a home that is 'landlord white' and the trim is flat, we tell people there is a reason the house was painted this way," Kollenberg said. "When we see it is over everything, it is a tip-off that it is just covering something up."

9. Unheated house in winter months. If the home has been properly winterized, there's no need for heat. If not, pipes will burst and cause water damage.

10. Blocked drains or pipes. These will cause future problems and may have already created sewage backups. Check for a telltale water ring in the basement, Kollenberg said.

Copyright © 2010 Detroit Free Press. Distributed by McClatchy-Tribune Information Services.

Upside Down?

According to a report by CoreLogic the West Palm Beach-Boca Raton-Boynton Beach metro statistaical area (MSA) is the 9th most upside down area in the country (highest negative equity). It states that over 45% of the properties are upside down in terms of equity in the property. Fort Lauderdale and Miami are also on the list at numbers 5 & 6 respectively.
If you weren't thinking about short selling your home, you may want to rethink it!

Active Duty Military can still get Tax Credit

The tax credit may have ended for many but there are still some who have an opportunity to take advantage of some government incentives. Active duty military have another year to benefit from the governments tax credit. Get a home under contract by April 30, 2011 and close by June 30, 2011 and you are eligible for up to $8,000 for first time home buyers and up to $6,500 for current homeowners. Since home prices are low, now would be the time to get in touch with a mortgage expert to see if you qualify and for what price range. It is likely that you will find some attractive opportunities out there now that most of the first time home buyers either have something under contract.