We’re seeing a disturbing fact pattern emerging with regards to short sale purchases and bank-owned or “REO” purchases.

Several of our clients, after conducting their due diligence in the form of a Home Inspection have discovered black mold in these houses. Often these houses are vacant and the upkeep or maintenance is supposed to be handled by a managing agent or by the Listing Realtor. What our clients are discovering in these situations is the house has been empty for quite some time and the maintenance has not been properly kept up to date.

In one instance the mold was discovered in a downstairs bathroom. The reason the mold formed: apparently a previous visiting Realtor with a potential buyer left the house with a toilet “stuck” in flush mode. The resultant humidity caused the growth of the mold. The Seller of the house had to hire a professional mold remediation company to completely gut the basement and treat the entire house.

In another instance the Purchaser and her Home Inspector turned on a shower in an upstairs bathroom. When they did so leaks sprouted from pipes all through the house. In the course of the inspection mold was discovered. Now the Purchaser knew why the water had been turned off when they arrived at the house: leaks and mold. In this case the Purchaser has moved on and decided not to buy the house. In the first example cited above, the Purchaser has not made a final decision on how to proceed.

As if the process of buying a home were not daunting enough, and the instance of purchasing a short sale or REO property complicated enough, this problem with poorly maintained and vacant houses brings yet another level of complexity to the homebuying experience.

Our advice to clients here at PHS: buy a regular old house that your Realtor finds on MLS with a Seller living there who needs to move. Pass up on those “deals” in terms of short sales and REO’s.