This post is for buyers who are buying a short sale or REO. There are lots of you, at least in Carlsbad and nearby communities of Oceanside, Vista and San Marcos, and from what I hear, elsewhere too.
A much earlier article on buying a short sale talked more about the process, and issues to be aware of.
Take a look, then come on back. I'll wait...
Now let's get back to the business of buying a short sale or an REO and what you may be missing.
In many real estate transactions it is common for buyers to find that certain things will not remain in the property, such as the washer and dryer, or the refrigerator. This varies from deal to deal, and may be disclosed up front in the MLS listing or become part of the negotiations. These items may be minor issues, or can become major conflicts depending on the parties involved and their feelings about the exclusion.
Buying a short sale or REO may dredge up more issues of things that do not remain with the house. In fact, they often are simply missing. And they are important to watch for, since the seller likely won't return them, and in the case of an REO, the bank is not likely to supply them. In some cases the amount of stuff missing is pretty surprising.
Appliances are often not there, including dishwashers and stoves (unlike in traditional sales where these are usually fixed in place and therefore stay with the property). That can mean thousands of dollars to replace a washer, dryer, stove/oven, microwave, refrigerator and dishwasher. And clearly you can't live there without some of this stuff.
Other items I have seen missing - toilets, sinks and faucets, tub, shower stalls, doors, sliders, windows, screens, carpet, tile, AC units, door knobs, light fixtures, disposals, plumbing (pipes), electrical items (outlets, switchboxes, receptacle covers), walls or portions thereof, entire kitchens and baths, water heaters...the list can be a bit extensive.
The reason to be aware of these missing items is obvious - as the buyer you will need to replace them, and this costs money. Perhaps more than you are bargaining for, or have the budget to deal with on top of your mortgage.
Now that's not necessarily all bad, since you end up with new appliances with warranties, and other new stuff which looks better than perhaps the originals, and adds value. But it's another aspect of buying a short sale or REO that can be overlooked and not factored into the decision process.
A good question any prudent buyer should ask when buying a short sale or REO...."What am I missing?"
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If I can provide more information about Oceanside real estate and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
All content copyright © 2009 Jeff Dowler Carlsbad Homes and Real Estate Tidbits
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Interesting Jeff as we see this kind of thing happening all the time with REO'S but not on the short sale side. Most of the time the seller is in the home right up until closing as does not take anything that they shouldn't.
Bill - well the REO's are generally worse, but I have seen plenty of vacant short sales. And in addition to things missing, some are really trashed or have been vandalized. How else to you explain broken windows and large holes in walls?
Jeff
I've seen photos where ALL the cabinets and interior doors were gone as well. Often they've knocked huge holes in the drywall or written nasty stuff - in permanent marker - on the walls. Bitter people can do much damage!
Jeff, that is a good heads up to give to Buyers. I find that if we eliminate as many surprise as possible the more likely the transaction will Close. But these surprises are painful to the pocket book no matter how prepared we are.
Jeff, somethimes after you add up the costs of replacing appliances and toilets and making other repairs, your bargain short sale or bank owned property is not quite the bargain it might have been.
So true. When people lose their homes, they tend to hold a grudge. So they do all they can to take out their frustrations in any way they can. And that usually results in disappearing appliances... and more! They feel cheated and they want to get even. That means the new buyer must exercise a LOT of caution!
Elaine - it is so sad to see those homes where you can tell someone truly went out of there way to be destructive. And buyers notice this, too. Not all that uncommon, unfortunately.
Jeff
I have seen so many of the short sales and foreclosures that have so much removed and lots of damage. The biggest problem is still appraisers using them for comps on good homes in great condition.
Hi Jeff, wouldn't you love to be a mouse in the corner and lsting to the discussion as these house are decimated? "Here honey, take this". "What is it" and the husband says, " It's a bag of all the door knobs from one side of the door."
It continues to amaze me how owners and tenants can be so destructive or blatantly vandalize properties. Is there some huge black market out there for used appliances?
Buying short or foreclosure houses can be a minfield of expense and worry. I often explain that the people who have lost or are lossing their houses are angry and depressed. They take it out on the house and often pull out as much as they can before they go. It is not always the "best bargain" on the market as many consumers think.
George - agreed. It needs to be pointed out in case they miss some of this stuff, but also they need to really think about the potential costs, and perhaps price some things out at Home Depot and make the list. And that doesn't even account for other repairs that may be needed, or the yard, or...
Pat - so true. I think many folks underestimate what all this stuff may cost. And that what they can see. We haven't even gotten to the inspection phase yet.
Lisa - sad but true. BUt then there are some homes that are in short sale or have been foreclosed where you can tell it was well maintained. Those are always a pleasant surprise.
Jeff
Terry - that is so true. And I always warn buyers of that, in particular in the case of homes they are buying that are not distress sales.
William - can you imagine. The extent of damage sometimes is appalling. Owners, or tenants have clearly gone on a rampage. Of it not, it's hard to imagine living in a place in that condition.
Rich - actually there is. There is a company here that advertises in the Penny Saver exactly to these homeowners as a way for them to make some money when they are in dire straits by getting all the appliances and other stuff out of the house.
Paddy - well you can understand how people might feel but hard to understand the destruction you see in some cases. And it does make some of these homes much less of a bargain because of all the clean-up and repairs needed. And some are not livable until they are fixed up a bit. A few I have seen really need to be gutted - a real contractor-special.
Jeff
Jeff
I don't quite understand why people have to go out of their way top be so destructive, but they do.