Deals Found In Distressed Home Market But Risks Abound
I often talk to house hunters and home buyers who think that they can get great deals on housing by purchasing distressed properties. While there are deals to be had in Toledo and some suburbs, this is a home buying strategy that requires great caution and extremely knowledgeable buyers.
The recession and foreclosure crisis has created a large stock of houses in various stages of foreclosure through out the Toledo area. While prices may often seem quite attractive on bank owned homes and short sales and auctions may seem like great opportunities, problems abound.
- Such homes are likely to be in bad shape with a history of differed maintenance and sometimes serious vandalism. Vacant homes may be subject to rapid deterioration and the problems including mold and water damage.
- Home inspections are often made difficult by a lack of utilities and by the absence of a seller with knowledge of the maintenance history of the house. Unsuspecting purchasers may confront hidden and costly defects after possession.
- Distressed homes are often sold ‘as is’ with little or nothing in way of disclosure.
- The process of purchasing a distressed home can be lengthy and complicated and may involve issues with titles and liens.
- Distressed homes may be difficult or costly to insure.
Home buyers entering this part of Toledo real estate market need to use great caution. They need to be willing accept a considerable degree of risk and most importantly have the ability to realistically assess the condition of the property and judge the costs of repair and maintenance. What appears to be a diamond in the rough may turn into a future nightmare.
