Seattle Real Estate:

This is the third post in a seven part series called Four Reasons You Don’t Want to Buy a Bank Owned Home…and Three Reasons You Do.

We’ve already covered one reason you don’t want to buy a bank owned home:
1. “Bank Owned Homes Almost Always Seem to Start Overpriced”

and one reason why you might:
1. ”Play Your Cards Right and You Can Buy a Great Home Cheap”. 

Here’s another thing to consider when you’re shopping Bank Owned homes in Seattle, or anywhere else:

2. Banks Don’t Know Anything About the House They’re Selling

When you purchase a home from a homeowner, that person is obligated by law to fill out a property disclosure statement.  That “Seller’s Disclosure”, as it is sometimes called, asks the homeowner a series of questions about the condition of the property.  Questions on the homeowner’s disclosure statement include the following questions and more:

• Has the roof leaked?
• Ever had any water in the basement or crawl space?
• Ever had termites or another pest infestation?
• Are the walls packed with black mold with purple spots and are you trying to unload this health hazard of a dwelling without anyone being the wiser?  (Well, maybe they don’t ask it quite like that…)

Of course, you don’t have to dig that deep into court records to find cases where home owners stretched the truth on their seller’s disclosure.  Most sellers,though, fill out their disclosures very conscientiously.

Well, what happens when you’re buying a bank owned home?  The bank doesn’t know anything about the house since the bank never lived there.  They may say that they are not filling out a disclosure at all, or they may just write on the disclosure that they have no specific knowledge of the property.  This lack of knowledge can be significant.

Think about it, a homeowner can often give you a running tally of when the windows were replaced, or about that time when the water heater did something weird and the service technician was out.  They can tell you if a licensed contractor put in the extra electrical in the laundry room or if it was Uncle Billy who learned how to install an outlet via correspondence course.

We always recommend that home buyers have an inspection.  In most cases, a competent home inspector will be able to uncover issues that might causes problems.  However,  inspectors don’t have x-ray vision, nor a time machine to investigate the disaster than a previous owner might have gone through great pains to conceal but is still a problem waiting to rear its ugly expensive-repairs-required head. 

Is this a deal breaker?  In most cases, unless you have reason to suspect something serious, it’s not sufficient reason to run the other way screaming but it is something to keep in mind.
 
Stay tuned for the next entry in the series about Bank Owned properties, “The 2nd of 3 Reasons You Want to Buy A Bank Owned Home“.

In fact, as long as you’re here why not subscribe to the Rion Seattle Real Estate Blog RSS feed or go ahead already and start searching for Seattle home listings?

This entry was posted on Monday, January 19th, 2009 at 10:36 am and is filed under Buyers, Kathryn Explains. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.