Pinetop White Mountain Blog

Good Afternoon Everyone,

I hope this post finds you relaxed and ready to face another work week.  My past week was a busy one.  Lots of buyers looking at property.  The difference in this past week was that buyers are actually considering buying homes offered by conventional sellers rather than foreclosures. 

I think the reality of buying a Bank Owned property is finally convincing buyers that while they may be priced well, the issues involved with buying them and repairing them after closing may outweigh the lower cost.  Buying an "As Is" property can prove to be quite problematic after the sale closes.  Buyers are finding that those defects that didn't seem so bad on an inspection report can prove to be very costly after closing.

Let me tell you about the experiences of one of my recent REO Buyers.  Buyer got a killer price on the house, no question about it. During the Inspection it was discovered that because of the cold winter this past year the pipes under the house were broken.  The Bank agreed to fix them but what they didn't tell the buyer is that they instructed the plumber was to do only the minimal amount of work needed so the pipes would hold pressure.  Whether it was a half baked job or not didn't matter as long as it didn't cost them much money.  That is exactly what the plumber did. 

Shortly after closing the buyer discovered other leaks in the pipes under the home.  He called the plumber back and the plumber told him that he had told the bank that the whole house needed re-plumbing but they weren't willing to do that.  He did just want he was authorized to do and that was to patch it up the best he could without risking his license.

Add to this the fact that after closing the Insurance Company the buyer had purchased his insurance through came out and inspected the house.  Because there were a few shingles missing on the downwind side of the house they told him he would have to replace the roof immediately or they were going to cancel his insurance.  It didn't matter that the roof was not actually leaking, if he wanted homeowner's insurance on his house he had to replace the roof. 

This is truly an excellent example why those bargain properties are losing their appeal.  Despite inspections there are many hidden defects that are bound to surface after closing, that is why many buyers are starting to move back to buying homes owned by regular sellers.  At least that way they have a chance of getting some of the issues addressed before closing and a real live reasonable human being to deal with, not some nameless faceless entity who could care less about the property as long as they clear one more file off their desk.

Sellers, this is good news.  This means that if you price competitively and have an appealing property in good shape, there may just be a buyer out there for you.  Just be prepared that no matter how nice your house and how much you see it as perfect, when it comes down to it the appraiser for the buyer has the last word.  Price right and you will be fine.  Price too high and you are bound to be disappointed because I can tell you from personal experience, those appraisals are coming in below where we think they should be.

Hope this helps everyone who is either buying or selling.  The market is still troubled but maybe this is a sign that it may get better soon.

Have a wonderful week, until next time....

Sandra Paulow, Associate Broker, GRI, SFR, REALTOR® (928) 242-0300