In the wake of the foreclosure crisis the real estate market is flooded with handyman specials, fixer uppers and REOs offering big profits for investors and huge discounts for first-time homebuyers. However, there is a huge difference between houses needing a new coat of paint and those with scary structural issues.
Will you find gold buried among the feast of foreclosures on the market, or will you be needing a hand to help dig you out of the money pit you invested in?
Hidden Costs or Buried Treasure?
There is a big difference between buying a home with cosmetic repair issues and buying a house with problems that threaten the integrity of the structure. Cosmetic issues can mean landscaping, painting, upgrading appliances or replacing flooring. These homes can often be easily turned around with a little sweat or gradual improvements over time. Structural problems on the other hand can often turn into far more expensive projects than planned. Plus, while there may be big profits to be had from these types of homes, most lenders will not consider loaning on them until problems are resolved.
In some cases sellers will remedy these problems before selling in order to enable buyers to get a home loan. However, if a home inspection isn’t done and they creep up on you after closing, you may be unable to sell the home. So make sure you know what you are getting into.
Let’s take a look at some of the most common structural problems and what you need to know about them.
Should You Buy a House With Foundation Repairs?
Surprisingly, foundation issues aren’t always as scary as they sound. In many areas of the country foundation problems are commonly found in many homes. This is especially true of Texas where some real estate investment companies have made millions buying up homes with foundation problems they know can easily be fixed.
Cracked walls, sagging roofs, and dips in the flooring can all suggest the foundation needs to be looked at. The great news is that in many cases professionals can remedy the problem in as little as one day.
The cost of rectifying this can vary greatly and depends on how many “piers” are required.
So, should you buy a house with foundation repairs? Be careful, don’t write it off, but always get multiple quotes and compare the number of piers, prices and length of warranties.
Buying a Home With Mold in It
Mold can be extremely common in some areas, especially those which have been affected by flooding and hurricanes as well as in tightly built new homes.
Mold is no joke. Toxic mold can not just cause skin rashes and congestion but serious breathing difficulties, especially in children and those with weaker immune systems. Mold can often be detected visibly and by smell, though not always. Despite the fact that home sellers are required by law to disclose such issues, considering the damage it can do, you shouldn’t buy a home without conducting a mold inspection. These inspections and any required remediation should be done to EPA (Environmental Protection Agency) standards and specifications.
Should I Buy a House With Powder Post Beetles?
Powder post beetles, like termites, destroy wood in homes, and over time can do significant damage to the structure. They get their name from the fine powder that they leave when boring into wood. As with termites, there can be a big difference between buying a home where there is a live infestation versus old damage that has already been treated. Your pest inspector should be able to recommend the appropriate solution.
Treatment for powder post beetles is relatively simple and can be handled by a local pest control company. Treatment protocols range from spot treatments with liquid insecticide to tenting and fogging the entire home. However, wood may still need to be replaced.
Homebuyers shouldn’t be too concerned about buying a house with these types of issues because, if you are buying in areas like South Florida, you may have an incredibly hard time finding a home that hasn’t ever had termites at some point or other. Normally the seller will agree to tenting the property before buying in order to satisfy lender requirements.
What Else Should I Look Out for When Buying a Home?
There are two other serious issues homebuyers should be on the lookout for to avoid making painfully expensive mistakes. The first is Chinese drywall. This toxic drywall has been found to cause severe health issues in short periods of time and goes on to infect many other materials in the home. Remediation is incredibly difficult, and it is likely that – in addition to replacing drywall, wiring, pipes and anything else in contact with it – it will need to be ripped out. Real estate companies like Carney Properties in Cape Coral, Florida recommend avoiding these homes altogether and refuse to associate themselves with them, even if they have been remodeled.
Roofs can be incredibly expensive to repair. A home needing a few shingles replaced is one thing, but brand new roofs easily run into the tens of thousands of dollars with waiting lists that can be years long. Plus, there may be hidden water damage within the home. If you are buying a home that may need a new roof in the next five years, make sure to get multiple quotes, and find out how long those quotes are good for and how fast the work can be done.
Remember, a few bug bites can be easily treated, and foundations may not be as scary as you expect, but you don’t want anything falling in on your head or invisible toxins killing you in your sleep.
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For me, I would rather find a home with no foundation problem for a better assurance of good quality.
This was very helpful. I am in the process of purchasing a HUD home. The disclosure mentions both possible mold and foundation issues. However, it’s a super cheap property that I can afford to pay for in cash. So, I’m going to go for it. Thanks!
Drew
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