March 7th, 2012 2:08 PM by Jennifer McGuire
In the past couple posts, I've discussed a seller getting qualified for a short sale with their lender(s). I've also discussed how a seller should handle offers. Today I would like to discuss a couple items that might pertain to buyers who are purchasing a short sale.
In Virginia, if you're purchasing a property offered as a short sale or foreclosure, you need to take due diligence and discover any problems with the property. Because we are aware these properties are being sold "as is", with no repairs being made by the seller/lender. Or, is that really the case?
ALWAYS be sure you do a thorough inspection of the property. This would include the building itself, water, sewer, title and survey.
If the property is being serviced by a well and/or septic, be sure you have someone licensed in those fields to pump & inspect the septic, and to test the water.
The normal test on a septic system would be a simple "walk over the drainfield." If the person doing the test doesn't smell anything, doesn't sink in anything, then it will probably pass the test. However, I would suggest you have someone licensed in this field to pump and inspect the septic. You want to be sure there aren't any clogged lines, the tank is level, and that it's functioning correctly.
Plus, I actually had someone who thought it was a septic system and found it was a cesspool, only through this process of uncovering the tank and pumping/inspecting process. This of course, when discovered by the Health Dept. rendered the property uninhabitable.
You don't want to absorb such a problem, and could potentially avoid this, by paying to have the system pumped and inspected.
If the water is found to be contaminated, you want to be fully aware of what it will take to make it safe for consumption. This may involve the installation of a purification system on the well. I've heard they may run $3,000+.
When should you do these inspections? Should you conduct all of these inspections prior to being a ratified contract with the seller? Should you pay for these inspections prior to the bank approving the short sale for the seller? Great questions. My answer proceed with caution. You definitely don't want to purchase a property that's going to cost you too much to fix up. But you also don't want to spend too much money on inspections prior to being the primary contract. Be very cautious. Do as many inspections as you can, as soon as you can. But don't spend too much money until you feel comfortable with the property, and the possibility of losing whatever you spent during the investigating process.
More to come.