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The Urban Team's Blog

By The Urban Team | Agent in Phoenix, AZ

How to Estimate Home Repair Costs on Bank Owned Homes

The following article on estimating repairs on bank owned or foreclosure properties came our way from the good people at Advantage Inspection Service. These are the guys we use for our personal property inspections.

Since many of our readers are buying homes in “AS IS” condition, we thought this info would be valuable and important. Enjoy.
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In 2009, 36.8% of all closed residential sales in the Greater Phoenix Area were lender-owned properties!
We all know that bank owned and foreclosure property sales are clipping along at a furious pace right now. Many consumers are caught up in the perception that they will undoubtedly save mountains of money if they buy a distressed property. Experienced brokers and agents know that this is not always the case. Repair costs can grow rapidly and turn a “great deal” into a time consuming frustration. Estimating repair needs and costs is crucial.

Your first step is a professional home inspection for several reasons. It is likely that the homeowner did not properly maintain the property as finances became strained. In some cases, an angered homeowner may cause both obvious and hidden damage to the property. It is not uncommon to see missing/damaged fixtures, appliances and components at a foreclosure property.

Start estimating. You can take the simple or detailed approach with estimating repair costs. A great first step is to go to www.fixfliprent.com/repairs where they have a free easy to use repair cost estimator. If you want a finely tuned estimate you can look at the Craftsman Book series of software. Trial versions can be found at www.craftsman-book.com/downloads which gives you the ability to estimate construction costs like a pro.

One final note. It is often a challenge to get the utilities turned on before the inspection. Persistence is needed in dealing with the various parties as you arrange for the inspection. Don’t give up and by all means have the home inspected. Who knows how many thousands of dollars it could take to repair an undiscovered defect.

Comments

By Phoenixcanadianrealtor,  Sat Mar 6 2010, 09:15
Pillar To Post Home Inspections hands out a comprehensive list of common home repairs/improvements which is fairly accurate in terms of pricing. It is an average of the costs across the USA, and is valuable for making the buying decision before you have to go out and get estimates. Also good for checking that the estimates you receive are within national averages.
By The Urban Team,  Sat Mar 6 2010, 12:19
Thanks for adding to the conversation. Good to know the various options home buyers have.
By Jim From Homebuilding-Questions.com,  Sun Jul 25 2010, 12:15
I agree with the importance of a good home inspection. To many people rush this process and find hidden problems later.
By Sprucesquad,  Wed Sep 22 2010, 07:11
Home repair involves the diagnosis and resolution of problems in a home, and is related to home maintenance to avoid such problems. Many types of repairs are "do it yourself" (DIY) projects, while others may be so complicated, time-consuming or risky as to suggest the assistance of a qualified handyman, property manager, contractor/builder, or other professionals. Repair is not necessarily the same as home improvement, although many improvements can result from repairs or maintenance. Often the costs of larger repairs will justify the alternative of investment in full-scale improvements. It may make just as much sense to upgrade a home system (with an improved one) as to repair it or incur ever-more-frequent and expensive maintenance for an inefficient, obsolete or dying system. For a DIY project, it is also useful to establish limits on how much time and money you're willing to invest before deciding a repair (or list of repairs) is overwhelming and discouraging, and less likely to ever be completed.

Spruce Squad is dedicated to the real estate and default mortgage industry and specializes in quick, inexpensive property inspections, construction management and maintenance. Our team is comprised of maintenance managers, general contractors and architects. Our clients include insurance companies, asset management companies, property managers, agents and homeowners.
http://www.sprucesquad.com/
By Petar,  Sat Apr 30 2011, 18:08
If you smell musty odors like mold growth chances are that some building materials are wet and the mold is still growing. When you dry this material out then of course the smell goes away, do you have a legal responsibility to inform a prospective buyer down the line? We can help you with these situations. We are a GC'S with a training in the stuff of "wet".
http://www.contracostacounty-waterdamage.com
By Carmen Brodeur- Top 1% Realtor,  Wed Jun 8 2011, 09:24
Great site. I will have to try it out for one of my buyers. Thanks.
By Paragonremodeling,  Fri Jul 22 2011, 05:32
Excellent information is shared by you. I am also from home improvement company which provide services for Patio doors replacement. Thanks.

http://www.paragonremodeling.com/

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