Detailed research, knowledge and experience techniques allow inspectors to identify defects. Poor upkeep when a distressed homeowner has abandoned the property or just before foreclosure can make the house look worse than actuality. An inspection should never be performed when the electricity; water or gas is turned off.
It is the buyers responsibility to have these systems operating so the home can be checked for efficiency. These are some of the items that are noted on narratives and used to justify below market pricing:
Mold
Abandoned homes that sit vacant without conditioned air for long periods of time will develop some type of Aspergellic mold. Almost every home in America has Aspergellic mold in the refrigerator. It’s like saying your epidermis is showing! So every home potentially has mold.
Warm weather climates are an excellent breeding ground for certain defects such as mold. This Fungus of small spores can become airborne and then inhaled which make certain types of mold dangerous.
Some molds produce mycotoxins that may cause health issues. Rightfully so, banks do not want to foreclose on property that has a liability and could cause harm to the public. Moreover, once you make them aware of the problem they have to disclose this material fact to the public which automatically will lower the price. In Florida, disclosure of patent and latent defects must be made to the public which causes a decrease in price.
Have you ever wondered why some banks refuse to turn on the utilities during foreclosure property inspections?
Water Damage
Damage caused by water intruding where it will enable attack of a material or system by destructive processes such as rotting of wood, growth. Rusting of steel, de-laminating of materials such as plywood or drywall. This defect sometimes can cause excessive build ups of mold.
Roof & Wind Damage
Missing or broken shingles. Shingles or rubber boots that are cracked or curling may show wear on a roof. A special type of wind or storm damage that is protected by policyholder insurance. Straight-line wind is a term used to define any thunderstorm wind that is not associated with rotation, and is used mainly to differentiate from tornadic winds. A downdraft is a small-scale column of air that rapidly sinks toward the ground causing damage.
When this type of damage occurs many insurance companies will pay for the replacement or repair of the roof. If you can get the seller to repair it helps the value of the house if not you have to decrease the price.
Sinkholes
Is a cavity in the ground, especially in limestone bedrock, caused by water erosion and providing a route for surface water to disappear underground. There are two myths to purchasing homes with sinkholes.
- Myth#1 – That sinkholes can’t be repaired. Sinkhole stabilization and repair is done by a process called grouting or underpinning. Underpinning is a method of remediation where metal piers are driven under the ground and is very reliable.
- Myth #2 – A sinkhole home can’t be insured. Not true. Most people don’t qualify because they need to have complete copies of engineer reports usually before and after remediation.
- Myth #3 – Sinkholes are large. This is not always true. Some sinkholes can be a foot wide and be in the back yard a long way from the house.
A bank will not want to take a sinkhole home back into their inventory after foreclosure. You can literally get these distress properties drastically reduced. There is a lot of profit in these homes if you know how to remediate them properly.
Radon Gas
Heavy radioactive gaseous element that comes from the natural decay of uranium that is found in nearly all soils. It typically moves up through the ground to the air above, then into the home through cracks in the foundation. Homes trap radon inside, where radon levels can build up. Radon from soil is the main cause of elevated radon levels but sometimes radon in homes may enter through well water. And in a small number of cases, home building materials can even give off radon.
There are small amounts of Radon gas in granite. The levels are not dangerous to humans. These levels are higher in granite from California. However, when writing a BPO (Broker Opinion of Value) for the bank or listing agent I may state “The house may contain radon gas”. Moreover, the disclosure that I am not certified to detect radon gas.
I am now disclosing a potential defect that the bank or listing agent has to consider when price negotiation begins. Banks and listing agents aren’t going to invest money to counter this disclosure.
Faulty Electrical Wiring
Poor electrical is dangerous and can usually found in Drug grow homes. Open junction boxes, poor rewiring or properties that have not been upgraded to the correct amperage. These issues are dangerous and would have to be disclosed to the public.
Termites/Wood Destroying Organism
a small, pale soft-bodied insect that lives in large colonies with several different castes, that feeds on wood and can be highly destructive to trees and timber. Due to Florida’s weather it is a perfect climate for termite swarming. Infestations generally occur during spring and summer during the morning following a warm rain.
It’s a myth that wood frame house aren’t good investments due to termites. However, it is not a myth that these homes are more susceptible to this kind of damage.
Polybutylene Plumbing
Inadequate water pressure, slow drains, signs of leaks in ceilings are all considered. However, certain piping is not reliable such as copper and Polybutylene . Extensively manufactured and used from 1978 until 1995, Polybutylene pipe is a water supply piping most commonly found in the “Sun Belt”.
It is estimated to have been installed in 6 to 10 million homes overall throughout the United States. Oxidants in the water supply systems, such as chlorine, react with the polybutylene piping material, causing it to flake apart on the inside of the piping. Eventually, small fractures deepen, cracking through the pipe, and it begins leaking.
If this type of plumbing is in your home it has to be replaced. The cost of a project is subjective and always a downward adjustment on price.
Chinese Drywall
Chinese drywall refers to an environmental health issue involving defective drywall manufactured in China and imported to the United States that began in 2001. Laboratory tests of samples for volatile chemicals have identified emissions of the sulfurous gases carbon disulfide, carbonyl sulfide, and hydrogen sulfide.
Due to the housing boom that began in 2006, American contractor started running out of drywall. Large shipments were imported from China, a country that does not have the same American environmental protection standards. It is estimated that over 100,000 homes in 20 states were affected.
HVAC / Water Heater
The heating and ventilation is one of the main systems that has to be examined during an inspection. The costs for HVAC can be very expensive. Airflow issues caused by extremely dirty or clogged return ducts that can cause frozen coils. Cracks in the heat exchanger or water tank; carbon monoxide leaks are all items that should be noted on an inspection report so the bank is aware of why adjustments are applied downward to price.
Poor Grading, drainage and gutters
Water stains, powdery residue on walls, mold or mildew. clogged or bent gutters, water not channeled away from house. Spongy soil around the foundation, signs of leaking in basement.
If you would like to learn more about negotiating lower prices for your buyer contact Keith Jackson at 321-662-0422 or KJ@EurekaFlorida.com
