It's difficult to pick up the paper or watch the news without seeing a report on foreclosed homes flooding the market. This backstock of homes created in the past several years motivates many lenders to move them at a fraction of their appraised value. If you want to purchase an old house, the thought has probably crossed your mind that you might be able to get a good deal on a foreclosure. It's true, you might.
As you're shopping for that old house bargain, be aware of one important, growing problem that could add thousands to the cost, either now or down the road. Mold might be mingling in the insulation, walls, closets, bathrooms and other hidden places of foreclosed homes.
Mold and foreclosed homes
Most people know that standing moisture in a home can lead to structural problems. The Environmental Protection Agency has done an excellent job of educating homeowners on how to prevent mold and mildew, but did you know that an empty home can also be an open invitation to this dangerous fungus? According to a report by National Public Radio, in some states up to half of foreclosed homes on the markets are at risk.
While occupied homes receive natural ventilation, as exterior doors and windows open and close, an operating HVAC system can also assist in pushing any moisture from the living spaces up to the attic. A foreclosed home might sit empty for a long period of time, and many have had their power turned off. Moisture can quickly morph into this undesirable by-product of neglect.
A former senior construction manager for a major national homebuilder, Conrad Neuf suggests the following, when considering the purchase of a foreclosed older home:
- If the power has been turned off for a while, request a mold and mildew inspection by a certified company prior to settlement.
- Any evidence of the black, sporey stuff should be handled by a professional remediation company, not a laborer with some bleach and a scrub brush.
- Insist on a certified report stating that all mold and mildew has been removed from the old house prior to signing your name on any closing documents.
A former senior construction manager for a major national homebuilder, Conrad Neuf discusses his experiences with unoccupied homes and mold in 2008, "I had two homes under construction that the owners backed out of the contracts just prior to completion. Since we figured the new purchasers would want a say in any finishes not already installed, we just closed up the houses and shifted our concentration to other units being built."
More than a month passed before Neuf unlocked the door to let in an air-conditioning contractor. Neuf and the contractor could not believe what they saw. The home had a finished basement and every wall down there, including the ceiling was covered with mold. They later discovered that the problem began with a minor water leak on the main level at a slider threshold.
Cleaning up that infamous fuzzy stuff and its invisible spores can be expensive and dangerous. Discovering the problem before you purchase can put the clean-up onus on the seller, instead of the buyer.
HSH.com, a website that compares mortgage rates, states that even a minor remediation job can cost up to $5,000. When there is widespread damage, such as in the home Neuf described, the repair costs can quickly escalate to between $10,000 and $30,000, or more.
If you do find that you've purchased an old house with a mold problem, CostHelper can provide assistance in estimating your potential clean-up costs. An old house can seem like a bargain at first glance, but always conduct due diligence to ensure you are really getting a good deal.
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