Abandoned Homes & Rushed Rehabs Create Big Risks for Buyers
It’s a great time to buy a home in Florida. Just watch what you make offers on!
Buying a home in Florida is incredibly attractive right now. The market seems strong, prices are fair, but values are rising, and interest rates make loans dirt cheap. Investors and builders have been busy at work absorbing abandoned properties and renovating them, or building new ones. These are incredibly valuable and needed services. But when these parties do a poor job it can be financially catastrophic for new buyers.
What’s the Problem?
The post 2008 real estate minefield corrupted the titles of many US properties. But that isn’t the only issue facing Florida real estate buyers today. Equally, and perhaps even worse is the damage being done by builders and rehabbers who are not doing a good job. We need more housing to preserve affordability, and we’ve needed real estate investors to come in and recycle and renovate abandoned and rundown homes. However, in many cases properties have piled up code violations, building permits haven’t been pulled for work done. In other cases unscrupulous firms are covering up horrendous issues. In some cases this may be dangerous mold, in others it may be covering up previous poisons like Chinese drywall. There may be some cases of ignorance and incompetence, in others it appears to be malicious greed.
How it Hurts Home Buyers
It’s what you don’t know that hurts you as a buyer. And many buyers don’t even know to question or look for these issues. Without doing their homework buyers can get stuck in really bad situations. If code violations and permit issues slipped through the cracks the new owners can find they face thousands of dollars in fines and costs, and may be unable to sell properties until they fix them. That’s all aside from the health issues and legal liabilities if these homes are rented or resold.
Sometimes these items are caught, but they are caught in the last few days before closing. By this time buyers have invested a lot of time and money. They may even have tenants lined up to move in, or may have their own belongings in the back of a U-Haul, after selling their previous residence.
The above doesn’t mean that people shouldn’t buy homes, or that it is impossible to buy safely, and find good properties. But it does mean that home buyers and real estate investors need to be wise and careful out there. How do you do that?
Get a home inspection on every property. That includes condos, townhouses, and brand new construction. Spend a moment on Google and look up public records to make sure any significant new upgrades that are being advertised had a permit i.e. garage conversions. Look for sellers and real estate listings which offer home warranties, and have already performed fresh title searches. Always, always get insurance, including title insurance.