Inspecting a Pre- Foreclosure

        In Central Florida everyone knows just how opportunistic today’s market can be with an abundance of short sale homes up for grabs.  New pre- foreclosure listings appear every day, with hundreds of investors and Realtors competing for the best properties.

       If you want to succeed in such a market you must do your homework on the properties that interest you to make sure it is a sound investment. That means, among other things, having the property properly inspected.

       Not all pre-foreclosure  properties are created equal. Dilapidated, abandoned, and neglected foreclosures in the slums are a different beast altogether than recently-vacant, well-maintained, and intact foreclosures in higher-end neighborhoods in the suburbs. Because of this, it helps to have inspections done on your properties. The scope and detail of an inspection will depend on the quality of the home itself. For example, if you are dealing with a property in a relatively decent neighborhood, and the home appears to be well-maintained and in good order, you could probably deal with inspecting the home yourself for minor repairs and leave it at that. It helps to witness a professional home inspection at least once so you can get a good feel for how it is supposed to work.

    Even if nothing on the outside appears out of order, you could be facing some major repairs on the inside. The things you need to pay special attention to are the big money items like the electrical wiring as well as the plumbing of the house especially if it’s an older house. If you have to get a house rewired or re-plumbed up to code, you could be talking big bucks!  Another big money item you should inspect is the central A/C system. A central A/C system can cost you thousands to get repaired or replaced. Also, you should get the roof thoroughly inspected for things like rotted wood, termite damage, the condition of the shingles, etc. If the house has ceiling damage, it means that the roof leaks or has leaked in the past at some point.

        The main benefit of a home inspection is to help you determine how sound of an investment the property may be, so you are not pouring money into a money pit. Again, not all short sale homes  are equal; some will require extensive, major renovations that could eat away at your profit margin and leave you in the red. Once you know what the home will cost to repair to proper standards, you will have an inside track on pricing your offer and maximizing your spending power.  If you’ve never re-habbed a house before, I would recommend that you start with one that doesn’t need a whole lot of repairs so you can get a feel for it before taking on any major projects.