The thing with buying a Sacramento foreclosure flipper home is you don't know what you are buying. A Sacramento first-time home buyer generally first views the home like this photo of pancakes with strawberries and whipped cream. The sellers might have staged that home. It can be enticingly beautiful but deceptive. You don't know what's under those granite counters and new paint job. You could press a fork into the pancakes and find it is raw in the center.
A home inspection won't necessarily disclose mold, but a buyer will be asked to sign a mold disclosure. The disclosure will inform the buyer that mold could or could not exist. The only way to be certain that the home is free from mold is to hire a mold specialist to test it.
Some of these foreclosure flipper homes have sat empty for months, maybe even for years before the bank sells them to an investor. I have one such short sale listing at the moment that has been sitting in water for more than 2 months now. It was flooded when pipes froze in the ceiling and burst. The mold is probably the size of basketballs. The investor who purchases this will fix it up and put it back on the market.
Another problem with buying a foreclosure flipper, especially a flipper that has been fixed up within the 90-day seasoning period for FHA / conventional financing, is the buyer could be subject to a mechanic's lien if the seller didn't pay the contractors. If the home is older, it may not qualify for a homeowner's title insurance policy. Without that special coverage in the title insurance policy, the buyer has no protection against a mechanic's lien.
If you read an MLS listing that advertises this home is "not an REO or short sale," check the public records to determine if the seller acquired title via a trustee's deed. Because when you buy a foreclosure flipper, you're buying that home in its as is condition. You will probably get no warranties, no disclosures, no repair work, no history of that home.
Don't be seduced by an attractive plate of pancakes. Moreover, hire an experienced Sacramento buyer's agent who can help you to investigate those homes and perhaps insert language into the purchase contract that makes the seller provides receipts and warranties. Hire an agent you trust who will represent your best interests.
Photo: Big Stock Photo
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
