Some Foresight on Foreclosures

I know this comes as a shock to many of you, but I don’t make a living as a writer. On the contrary, while the fine ownership of In&Out pays me much more than I’m worth, 48 cents a month just doesn’t pay the bills. My real job is managing a home inspection company, and every once in a while I feel the compulsion to do a column related to said real job. I’m just funny that way.

Just a few years ago, the real estate bubble was in full bloom. Sellers were receiving multiple offers on their homes before the ink was dry on the listing agreement. Buyers, on the other hand, were scrambling to get a piece of the American dream. A full price offer was no guarantee that they would get the home they desired so offers above asking price were commonplace.

During this wild and crazy time, the seller held all the cards. They would smugly offer their home “as is”, refusing to make even a minor concession. Can’t say that I blame them, that’s what happens in a seller’s market- it’s that whole supply and demand thing that we learned in Economics 101. As a matter of record, I did the same thing. The problem arose when buyers, and sometimes the agent representing them, would add two plus two and get three! They would think that “as is” translated into “no home inspection”. The mindset was- ‘why should I pay for an inspection, when the seller won’t fix anything that’s found”. This wrong-headed thinking led to many a homebuyer purchasing a home that was not only overpriced, but in need of serious repair. Not very smart, and shame on any agent who supports this bad advice!

Let’s fast-forward to today. Look in any real estate listings publication and you’ll see numerous ads for “short sale” or “bank owned” properties. Times have changed, and there are opportunities galore for buyers! (Just a bit of unsolicited advice- In a buyer’s market, YOU BUY!!! They don’t last forever)

Sadly, buyers and their agents are making the same stupid mistake that they did a few years ago. Because short sales and bank owned properties are being sold “as-is”, the inspection has once again become the red-headed stepchild of the real estate transaction. Fool me twice, shame on me!

Don’t make this mistake! Bank owned and pre-foreclosure properties have the same thing in common- distressed homeowners. While owner occupied pre-foreclosure properties may still be maintained, investor owned and bank owned properties are quite often neglected. Utilities are often shut off for long periods of time. Some are even intentionally damaged by former owners, tenants, and vandals.

A proper home inspection costs just a few hundred dollars and can save you thousands. Don’t make the same mistake that you made a few years ago. And if your agent recommends that you not have the property inspected, then you need to find another agent.

Ok, now you have some good advice, and I’ve actually met my quota to talk about home inspection at least once a year. It’s kind of funny that when I do write this type of column, I almost always get one or two emails from real estate agents accusing me of trashing their profession. For the record, that’s not my point. If you are truly a “real estate professional” this should all make perfect sense. If you feel differently, please do contact me. I’d be happy to print your letter and respond publicly.