Here is what happpened. Bank first rejected to pay for addressing the mold. So we wanted our contract be revoked and asked for our earnest deposit. After which the bank came back and said they need a Restoration Action Plan from a third party company, about how the mold will be mitigated. I called a reputed Mold Restoration Services company and they said home owners don't need this action plan as they want to save this $400 and their company have to strictly follow EPA and IICRC guildlines to fix the mold and they will not come down on the quote they gave us and the bank to fix the mold.
Bank thinks they need the action plan as they do not want to be ripped off by the guys who are fixing the mold and want a third party company to verify their work. Now this plan costs $400 and the bank wants us to pay for it. So it is something we pay for so that the bank is secure and not ripped off!!!
Now the question is - what if we invest another $400 and put the plan together for the bank , the bank realizes it is a lot to pay for restoration and is decides not to pay for it at all. Then we have lost another $400. apart from inspection costs. As this was all getting more stressful then we thought, we revoked our offer all together and have asked for our earnest deposit.
If mold is present and you still intend to purchase the property, you will need (either paid by you or the bank???)
to have a special mold inspection and certification that it is actually toxic mold and then have it professionally
remedied, which depending on where the mold is found, what kind it is and how much of it is there could
be a reasonable cost or could be major cost....
Do not buy a home with mold, unless it is professionally taken care of...
By the way some reasons for mold may be that the roof was leaking, other reasons depending
on where it is found, could be a constructional problem that also needs to be repaired, often not
enough air flow in an attic or a basement / crawl..... or just nobody lived in the home, and heating
and cooling systems were not working properly!
So very careful and make sure as the buyer that you will receive a certification by a professional what kind
of mold and how it has been taken care of and whether anything else needs to be done to avoid it in the
By the way there is tons of information on the internet, just google "mold"
Good Luck to you!
Edith YourRealtor4Life and Chicagoland and Northern Illinois Expert
This is an important issue you bring up regarding buying foreclosed homes. When a property is abandoned for
a period of time, proper heating and cooling controls are now longer maintained because the house is vacant.
Without proper heating, cooling and ventilation, issues such as mold can arise. The type of mold and the proper way of cleaning and disposing of it may be regulated by the EPA.
How old is the home? Before 1978? Plan to change out windows? This,too, can be an issue to be aware of.
People who purchase and want to flip properties must be cautious about all these issues.
Prudential Ambassador Real Estate
You would want to call your insurance company prior to purchasing the home to see what they would and will not cover. Most likely they would put a rider on your policy NOT covering the known defect. Therefore you may want to get your earnest money back and move on to another property if the bank is unwilling to make the insurance claim prior to the sale.
Personally the mold thing is really overblown in my mind especially If you consider the number of plumbers who encounter mold on a daily basis and you never hear of them dropping dead from mold. This topic has received to much play in the media. Not that there aren't people who are allergic to harmful spores and have become ill from living in unhealthy environments but, this really is the exception and not the rule if you look at the big picture.
As far as selling in the future, as long as this is resolved and repaired, you would need to disclose but should not be an issue. Insurance will not repair mold issues or allow a mold claim.
My experience with this type of issue with as is homes owned by lenders....they will decline your request and wait for the next buyer.
If the moisture problem is severe, it may require that a drain tile system be installed. There are several waterproofing companies that do this type of work.
In the future, you will need to disclose that there once was a problem, but if you take care of the surface control issues and/or install drain tile system, and do not have any more problems, your disclosure will reflect that, too.
You will be able to get your earnest deposit back if you don't want to purchase the property because they don't want to remedy the issue unless they have a clause you signed off on. You can go back in and see if the problem is remedied. If it is not, you can walk with your deposit.
The issue is not so much about the mold itself, as it is the medical issue for you and your family. 1 out of 9 people suffer from Rhinitus, which is an allergy/asthma condition. The number one cause is poor indoor air quality. So, if you are planning on living in this house then you will get sick at some time or another. I have gone through some additional training with regard to "historical contamination" through the EPA. I can say factually that you need to get the mold treated/removed, regardless. Go the EPA website and look for a local company, but you can email me if you like and I can put you in touch with a company here in Texas that might be able to refer someone.
Now, to answer the bank responsibility question, the bank is not liable for any home defects as they are exempt per federal laws; they are exempt from â€œSeller Disclosureâ€. They would not have spent any money to remove either; they donâ€™t have the time or money. As is whereas really means, take it or leave it.
As for the earnest money, there should have been an inspection period. You can get your earnest money back if you are within those guidelines. You may want to call a real estate attorney beyond that.
If you love the home and community, contact the EPA for advice on mold remediation. Good luck!