Posted over 14 years ago

Mold Conveys, No Extra Charge

I was sent the specs on a home over a month ago by a fellow realtor who knows I buy homes in rough shape, fast.  He said, Justin, check out this place.  It’s a foreclosure.  Its price at about $550,000 it is worth about $500,000 after fix up and it has a major mold issue.  Without even seeing the property I did the math.   (You did catch that the bank was over pricing it by $50,000 even if it were in perfect condition?)  I figured if it had a major mold issue it probably needed complete remodeling as well.  I estimated $80,000-100,000 in repair costs.  (I get better pricing than the average consumer, Joe the home buyer would pay at least $120,000)  I deducted that costs, all the transfer costs for buying and selling a home, finance costs and desired profit margin and I sent in an offer of about $250,000.  The bank counter offered me at $550,000, the original list price. I brushed the house off and moved on.  I came back to it recently and noticed it was still available.  I instructed my colleague to reach out to the listing agent again.   The agent said they might be a little more flexible if we can get up to the $300,000 mark.  Upon hearing this I said I would get over and take a look at the home.  I was thinking that since this bank was so stubborn that maybe I had been fed bad information.  The house must not be in that bad of shape if the bank is so confident in its pricing. I walked into the home this very afternoon and saw one of the worst disasters I have seen in quite some time.  These pictures were taken just this afternoon.  The entire basement is moist with active growing mold.  This is very thick mold.  The one picture is of a bedroom door with mold growing on it as thick as a nickel.  The walls are moist and the drywall is crumbling.  The kitchen has been stripped of all cabinets and appliances.  The bathrooms are about the same.  The roof on the garage needs to be replaced, and I’m not just talking the shingles, I’m talking structural.  The wood floors looked good and the brick exterior was nice, besides that there wasn’t much else.  To me, the house was beautiful, just what I like to see, a house that needs my help to become a home again.  But, I shake my head and wonder what are these asset managers thinking?  What is there strategy or incentive to sit on these homes and let them grow more mold and deteriorate further?