REO – continued…

Can this be an REO?

Maybe. But WAY not likely. When homeowners can no longer afford their mortgage payments, their interest in preserving their home goes up in smoke along with their hopes of the American dream of home ownership. Some even lash out in anger and intentionally damage the property. Those who might have installed upgrades have been known to remove them, figuring the banks are too busy to prosecute. Throw in a vandal or two and NOW you have the recipe for an REO (foreclosed home).

There are certainly opportunities to be found when buying an REO. Perched at the bottom of the market, REOs are the only choice for some who simply cannot afford anything else. However, it’s definitely “Buyer beware.”

Buying an REO is not a proposition for the faint of heart.

To help prepare you for what you might encounter, I’ve provided 8 very typical categories.

1. Utilities Off:

Normally, banks don’t pay for utilities once they’ve foreclosed on a home. If power, water and gas are going to be on, it will be at the behest of the listing agent. Let’s say you have 120 foreclosed homes listed. Would you want to pay utilities on the lot? Not likely. Add to this the fact that if the water is turned off, people still consider the toilets a resource to be utilized. Right. Nasty. And if you want to view them after it gets dark, bring a flashlight. And a German Shepherd.

2. Trashed Carpets:

How do they do it? Trashed carpets are such a constant that I’ve concluded they have a secret website with a standardized recipe. It’s gotta be something like the following:

• · Allow 3 toddlers to walk around the house with red Kool-Aid. Spill frequently.
• · Wait for rain, then wipe all dirty footwear liberally on all carpets (even in the closets).
• · Grind in the remnants of FCWT (Food Consumed Watching Television).
• · Throw in some unsavory activity by Fifi (the un-housebroken doggy wonder).
• · Let it sit for three months during a hot summer with all windows and doors tightly shut.

3. Bizarre Paint Schemes:

Maybe it’s just me, but it seems that almost every REO I enter has a bizarre paint scheme. I’m guessing they hit up the “OOOOOPS” bin at their local Home Improvement megastore for the “SURPRISE!” factor. And no two rooms are painted the same color. Or painted well, for that matter.

4. Missing Things:

When people lose their home, they want to get back at “The Man.” So they take stuff. They figure, “If I’m gonna lose, I’m not going down without some souvenirs.” To make things even worse, once a home appears to be vacant for any length of time, it magically materializes on opportunists’ radar. I’m convinced they’ve got a secret organization out there somewhere. They swoop in and “avail themselves” to various items. The following are the sorts of things I’ve seen “missing-in-action”:

• · Heaters and air conditioning units
• · Kitchen cabinets and counters
• · Closet units
• · Any appliance that can be removed in any fashion
• · Toilets
• · Bathroom sinks and vanities
• · Light fixtures (including recessed can lights)
• · Doors (including the front door)
• · Windows
• · Copper pipes and wiring

5. Unpermitted Renovations: (see You TOO Can Purchase A Ticking Time Bomb! One Easy Step! and What Might Your Next Home Purchase Have In Common With The Titanic?)

Where do I begin? Here are a few standards:

• · Garage conversions
• · Extra bathroom in the garage
• · Dubious kitchen and bath “remodels”
• · Extensions to the rear of the home

6. Unlawful Residents:

There are a few options in this category. Four-legged critters include the rodent varieties found in your locale, including rats. There are also some in the two-legged variety that may include the following:

• Vagrants who broke in and now call this “their” digs. Shopping carts in the vicinity give this one away fairly quickly.
• Renters who were rented the home under false pretenses by scam artists who, (1) ran a Craigslist ad, (2) showed up to collect first and last month’s rent and (3) handed the new “tenants” the keys. It’s a common scam in some areas.

7. Owner Induced Contusions and/or Vandalism :

Run into a hard southbound object while moving in a northerly direction and you will end up with a bruise, black eye, bump, etc. Can be nasty. Whether it’s kids trashing stuff “for fun” or a family member takin’ out their rage, the result is the same. If you are a house and you encounter hard, moving objects, contusions look like the following:

• Holes in walls (often surrounded by shoe prints)
• Holes in doors (ditto)
• Bashed in corners (from moving furniture in a “non-professional mover” manner)
• Broken windows
• Broken mirrors (bathroom and mirrored closet doors)

8. Mold and Mildew:

Any home left shut up for long periods of time without ventilation can experience mold and mildew, especially in damp climates or seasons. Add to this the occasional person who, in total distain for future occupants, “leaves his mark” before he leaves and it can get pretty nasty.

Don’t be discouraged – the idea here is to let you know what you might encounter so you’ll be prepared. Some REOs are actually quite nice. Unfortunately, there are others that are, well… not so much. Do your homework, order inspections, consult contractors for estimates and you may very well end up with …

A nice place to call home.