Sunday, January 20, 2013

Fresh Paint and Carpet? Buyers Beware What Lies Below

Eager buyers of the housing bubble carcasses should beware of languishing properties receiving a face-lift. Under that fresh paint and carpet may lay a homeowner's nightmare.

In the surge of desire to own a home in a depressed market, it's easy to rush in and go for cheap. So easy that plenty of investors are buying up properties, and often refurbishing and reselling (flipping) them. And while many are doing the right thing and offering quality properties, we've seen evidence that hidden pitfalls await the unwary.

Just down the road is a home that was purchased in the market's heyday. The new owners promptly began gutting the house, adding a second story and starting to put on a tile roof. Then the market tanked, and the house has sat for over two years, untouched, exterior Tyvek paper walls yellowing and unprotected, a partially clad roof exposed to the elements. What unlucky person will eventually buy the home, never knowing that it sat decaying for years.

Nearby sits nearly an acre of parched property, all that remains of a once majestic home, abandoned and demolished, now parsed into four weedy lots for sale. Wonder if the bank that presumably now owns it knows that in one lot, under the weeds, lays an old swimming pool that the transitional owner filled in with concrete -- a nightmare for anyone planning to build a home there.

So what's a buyer to do? Cross your fingers and hope for the best? Actually, there are resources to use to protect you.

The key is to research the property's permit history. Contact SitePro for the permit history. For most construction, including windows and pools, a permit must be obtained from the city. These permits expire within different windows of time. If a home receives multiple permits for the same project, it is likely it has been sitting there unfinished for a while. Depending on the project, buyers beware. Such homes that have been sitting too long without work or inspections receive a warning and may be subject to demolition for failure to respond.

Checking a property's permit history also helps reveal significant changes. Say a pool permit was taken in the 1960s, but now no pool is evident. The buyer may want to do some research to determine what happened to the pool.

Of course a home inspection is encouraged, prior to purchase, because what you see isn't necessarily what you get. As an example, those new outlets may be put on old wiring. As a result, while the three-prong outlet may imply the appliances will be grounded, in reality they're not. A SitePro inspector can determine that.

The lesson is, only fools rush in when it comes to buying a house. Take the time to do your homework!

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