Buying a Bank Owned Home in McCormick Ranch? Look up!

Are you shopping in the distressed aisle for your McCormick Ranch home? Make sure to look up.

While the purchase of a bank owned home or a short sale tends to be fraught with a little more risk than a traditional resale transaction, it is important to note that buyers typically maintain inspection rights on distressed properties. While the various “As Is” clauses and addenda dictate that the seller is not responsible for making repairs on these properties, most purchases involving bank properties do allow for an inspection period (though the time frame may be shrunk from the typical 10 days allowed under the boilerplate of the standard Arizona Association of Realtors contract).

*In short, the bank won’t likely fix anything, but you are allowed to verify condition before deciding whether or not to continue with the transaction.

During the course of your inspections, it is always prudent to spend a little extra time on a bank property as there are no disclosures of prior defects. The institution that now owns the property never occupied it, and knows nothing about its history other than the pertinent fact that the previous owner defaulted on his/her deed of trust.

It’s all about the Benjamins to the bank.

The purpose of this lengthy preamble? To add a little context to the freak hail storm that struck large pockets across the Valley last (2010) fall. If you have been watching all of the new roofs going up over the past six months, you know that the McCormick Ranch area was hit hard. With insurance companies passing out full roof replacements like they were candy, it is not uncommon to see streets where virtually every home features a brand new roof. Foam and asphalt shingle roofs, in particular, took wicked beatings.

So while most owner-occupied properties in the area that sustained damage have been repaired or replaced, the bank-owned properties that have been sitting vacant for over a year are likely to leak like a sieve when the monsoons roll around this July. The price points of such properties are often attractive enough to offset the 10-20k many will need, but it can be tough to swallow when it is not an anticipated cost.

Before plunking down money on inspections and appraisals, I’d recommend having a professional walk the roof of that bank owned steal to help you determine the true out of pocket price of ownership.

Oh, and if you are buying a resale property in McCormick Ranch? Make sure to find out if the seller had any repair work performed in the aftermath of said storm. While one of our selling clients was able to obtain full roof replacement on a claim from that storm as recently as this past month, the likelihood of that happening on another property dwindles the further removed we get from the event. The insurance companies aren’t going to be in the roof replacement business much longer.

Happy hunting,

Ray & Paul

 

Buying or selling a home in the McCormick Ranch area? Give us a call. Online data and pictures can give you 90% of the picture. We’ll fill in the remaining 10%.

*Do not rely on any general statements herein as legal advice. We are not attorneys, nor do our statements pertain to a specific transaction. Rights and restrictions within a transaction vary depending upon the documents used, attendant verbiage, alterations, etc. ¬†Long disclaimer short: I ain’t talking about your deal, homie.

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  • Irene

    and some owners took the short cut and with foam roof repair and only did a coating not full repair… like putting lipstick on a pig one more reason to have a professional look at the roof!

  • Excellent point, Irene. There’s never a shortage of those who may choose to pocket the windfall by attempting a home-ec repair.

  • Words to the wise in any resale but especially baml owned. In Texas inspectors include a thorough look at the roof during inspection and if it ter are any red flags call for additional inspections. Another thing that is common (at least in Texas) after a hail storm, crowds of “fly by night “roofers” arrive and usually do a lot of cheap roofs that later need additional work but by then they are gone and so is the warranty. I try to stay with local companies.

  • Paul Slaybaugh

    Our inspectors tend to be every bit as thorough, Russell. In some instances, though, it pays to be aware of potential issues on the way in. Hoping local buyers will be cognizant of the roof issues this storm caused this past year so that they can avoid paying for inspections and appraisals on a property they may not be adequately prepared to repair. No point flushing $500-1000 on a non-starter.

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Paul Slaybaugh is here to sell houses and chew bubble gum. He's all out of bubble gum. More About Me >>>

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