Question Details

Esteban, Home Buyer in North Leg, Augusta, GA

Bank Owned Home is Winterized....question about RISK

Asked by Esteban, North Leg, Augusta, GA Wed Jun 18, 2008

I'm interested in a property that is bank owned - as usual the listing is pretty much one-sided (which I totally understand). No disclosures, no letters, home is winterized, etc. Since I don't have the luxury of even turning on any of the fixtures (a/c, stove, sprinklers, etc.) I'm trying to gauge what amount of risk (dollar-wise) I should build into an offer. Suppose the house is listed at $489K - comps have been run and that price seems "fair" for a home that shows well. This one needs $4,000 to $6,000 estimated in immediate repairs that are mostly cosmetic (some roof shingles missing, carpet in one room is trashed/moldy, french doors to deck don't close all the way and moisture can get in, crack in basement foundation). For example, I'm taking the RISK that the 8-year-old stove doesn't work, or the hot water heaters need replacement or one of the furnaces is inoperable. Is $5K enough "reserve" to deal with this risk? Not flipping, this will be primary residence.

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I have yet to find a bank owned, winterized home that wouldn't allow you to pay to turn the utilites back on and then pay to have them turned back off (rewinterized) if you don't buy the house. I would recommend you pay the few hundered dollars to have someone come out and turn the utilities on and then back off and hedge your risk if you really are interested.

Appliances aren't the only things that you could run into. I have seen numerous houses that had holes in the pipes (from freezing) that wouldn't be accounted for in your appliance calculation.

Cameron Piper
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0 votes Thank Flag Link Wed Jun 18, 2008
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