That’s right, just like the title says – there are some houses purchased as foreclosures and flipped. Some of those houses may have seen severe mold problems. I’ve seen a few of these. I’ve been asked to list some. My response has been, “we have to disclose problems that may severely effect property value.” Seller’s response has been, “I’ll look for another agent.” It doesn’t take much for investors to find Real Estate Agents who don’t ask questions.
How do you protect yourself against those types of issues? Most of the time its not that difficult. Many REO properties with mold problems can only be viewed after signing a release. Any Real Estate Agent worth a plate of beans will be smart enough to look at the property history on the MLS to get an idea of how much the seller paid for the property. A quick look at the old listing will tell if it had a release for mold attached to the listing. After all, if the Real Estate Agent your working with represents you, don’t you think they should be looking out for your best interest? This is one reason why it’s important for a Buyer to have an Agent represent them.
Don’t expect your Agent to do miracles on price. It all depends on the quality of the work done on the property and what buyers are willing to pay in the area. Most foreclosed properties have few if any pictures which makes it difficult to gauge the amount of work done on the property. If the property did have a mold release form attached to the listing, the seller should have proof of proper mold removal by a licensed or certified professional. After all, the seller has to pay income taxes on profits from the sale and a deduction would come in handy. Common sense tells you the repairs should be accounted for.
An experienced Real Estate Agent will be able to walk into a remodeled home and assess the quality of the repairs. After viewing hundreds of foreclosed and remodeled homes in the area, Agents are familiar with the quality of repairs and sometimes the investor doing the work. Real Estate Agents are not licensed to perform a complete inspection or tell you if repairs are up to local codes or not, but can point out questions to bring up to the licensed inspector of your choice. Buyers are often surprised at details that come up when they have a new set of trained eyes looking over the property. This is why its so important to work with a good Real Estate Agent and hire a good inspector.
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