Top 5 Conditions Found in Vacant & Foreclosure Properties

To help today's home buyers take advantage of historically low home prices and interest rates, HouseMaster, one of the most respected names in home inspections, has identified the top five conditions most likely to be encountered when buying foreclosed or vacant homes.


1. Moisture Problems: When a house is closed up, the climate is humid (monsoon season!), or there are ongoing water leakage issues visible, mold is commonly found - and has the potential to be extensive. When a home is closed up, it exacerbates the condition, creating a high humidity environment in which mold thrives. HouseMaster inspectors have seen homes covered in black mold after just a few weeks, but these problems can be prevented and eliminated through proper clean up and ventilation.

2. Defective, Leaky Gaskets, Valves, and Hoses: It's common for home inspectors to find leaking valves, gaskets, and appliances in homes that have been foreclosed or vacant for an extended period. No matter how big or small, every appliance or plumbing fixture in a home includes at least one valve, gasket, and/or hose which can dry out - creating gaps and leakages. Freeze damage can cause a burst pipe (yes, it can freeze in Arizona!), damaged valve, or gushing water. Even a minor leak can cause consequential water damage and/or mold.

3. Vandalism: Vacant homes may be subject to damage from vandals or thieves looking to steal anything of possible resale value. HouseMaster inspectors have found homes stripped of everything from kitchen cabinetry to plumbing, wiring, and even structural elements. Usually these items are removed without consideration for safety or consequential damage. This often results in a reduced price for the home.

4. Unwelcome Guests: Overgrown vegetation, broken windows, scattered debris, and water leakages are an invitation to many unwelcome guests such as insects, rodents, and cats. Whether these vermin are present for a short or long period, they can cause damage and create secondary problems such as an unsanitary buildup of droppings, fleas, and/or other health concerns.

5. Blocked or Damaged Waste and Sewer Line: Issues with house drains, and waste and sewer lines are also not uncommon. Deliberately blocked lines may result in overflow damage (juvenile delinquents breaking into a home can do this!), an inconvenience that could be costly to repair. In other cases, the normal buildup of waste products in the lines will harden and contribute to flow restriction or blockage. Even minor leakages can cause soil to dry out in the wrong area, which can contribute to pipe movement and damage. Buyers of vacant homes may want to consider sewer line or drainage pipe inspections to assess potential issues.

Thank-you for this information HouseMasters! They can be reached valleywide in Arizona at (480)345-8570.

Solve these vacant home issues by placing a pre-screened and qualified Home Manager in any vacant homes you have listed in Arizona. The service is FREE and the issues that are avoided may be tremendous! info@AzVacantHomeSolutions.com

The Vacant Home Problem (an Estate Planning Attorney's view)

By Karen Sinchak Higby
April 2010

When a person dies, his or her home is often one of the most valuable assets in the estate. In many cases, the home will be sold by the executor, so the cash proceeds of sale can be distributed to the heirs. Until recently, homes could usually be sold in six months or less, especially when the executor was willing to drop the price below the market norm.

Today, the picture has altered dramatically. Because of the downturn in the real estate market, due in part to the number of foreclosures and the inability of prospective buyers to obtain financing, a home can be difficult to sell, even at a substantial price reduction. Executors are finding themselves still sitting on the estate's home after two years or more. Funds must be retained in the estate to cover the ongoing costs associated with the estate home - mortgage expenses, taxes, insurance, maintenance and repairs, etc. Oftentimes, the heirs receive little or nothing until the home can be sold. Worst of all, vacant homes have become targets for vandalism. Appliances, lighting fixtures, even copper plumbing, has been ripped from homes, bringing down the already depressed value even further.

We attorneys who represent executors, find it difficult to advise our clients about how best to deal with these problems. The role of the attorney in counseling his client who is serving as an executor is to make sure the executor meets his fiduciary duty to the heirs of the estate. That can be a difficult task in today's economic environment, especially when there is a vacant home to sell.

One option for the executor is to rent the home until it can be sold. The obvious advantages are that some or most of the expenses can be shifted to the renter and the incidents of vandalism can be reduced or eliminated. Unfortunately, the disadvantages are glaring - finding a qualified renter can be a daunting task and delaying the sale usually makes the heirs more frustrated.

The good news in this dreary picture is a new real estate service which can eliminate most of these problems. An example is Arizona Vacant Home Solutions, LLC. This firm places qualified, temporary home managers (not renters) in a vacant home for whatever period it takes to get the house sold. The home managers are carefully screened; they know in advance that they must be willing to show the home to prospective buyers while they are occupying the home, and that they must be willing to move out on short notice, when the home is sold. During the term of occupancy, Arizona Vacant Home Solutions will pay most of the carrying costs other than debt service. The advantages to the estate are enormous - the home is no longer vacant, it is no longer attractive to vandals, it "shows" better to the prospective purchaser, and the estate's expenses are greatly diminished. Sometimes, the home manager turns into the purchaser. This appears to be a win-win situation. The key to its success is the diligent homework undertaken by the placement firm in identifying qualified home managers. That might mean someone who is new to the city or area and wants a chance to get the feel of a new community before buying into it. Or it might be a high-level executive who is on temporary assignment and prefers a home over a hotel room. Or it might be a person in the process of selling a home elsewhere who has a good income but can't qualify as a buyer until the other home is sold. It seems as if there are a myriad of situations which produce that qualified temporary home manager for a vacant home, frequently with their own furnishings, making this matching of interests work well for both parties. Executors (and also trustees of trusts, who have identical issues with vacant homes) are better able to fulfill their fiduciary duties to the heirs they serve.

Hats off to firms like Arizona Vacant Home Solutions who have had the vision to solve one of the real estate market's toughest problems!

Karen Sinchak Higby, Attorney
SINCHAK & ASSOCIATES. P.C.
8901 E. Pima Center Parkway
Suite 135
Scottsdale, Arizona 85258

Phone: 480-991-8101
Fax: 480-991-7447
khigby@sinchakpc.com

http://www.azcentral.com/business/realestate/articles/2009/10/21/20091021phx-neighborhood1021.html

http://www.azcentral.com/business/realestate/articles/2009/10/21/20091021phx-neighborhood1021.html

Are Rising Home Prices a sign of Recovery?

House prices rose 1.4% in June 2009 following a 0.5% increase in May as the Standard & Poor's/Case-Shiller 20 city house price index registered it's first consecutive monthly increase in over three years. " For the second month in a row we're seeing some positive signs", said David Blitzer, chairman of S & P's index committee. Only 2 cities, Detroit and Las Vegas, in the 20 city HPI experienced price declines from May through June. If you look only at these narrow statistics to base an opinion, like is frequently portrayed by the main stream media, you might think the housing market has hit bottom and the recession is at an end. Is this 2 month price rise really a sign of recovery?

Yale University professor Robert Shiller cautions that it may not be a turning point due to high unemployment and the large inventories of foreclosed homes weighing on the market. Despite the upward momentum in house prices,"I would express great reluctance in forcasting where we are going from here, because we have conflicting signals right now", Mr. Shiller said.

Atlanta Fed Cheif Dennis Lockhart expressed his opinion that the July 2009 jobless statistic of 9.4% nationwide would move closer to 16% "if one considers the people who would like a job but have stopped looking - and those who are working fewer hours than they want". The employment environment is not showing signs of improvement yet.

Keep in mind that the June Home Price Index shows that house prices are down 15.4% from one year ago and down 30.2% from their peak in the second quarter of 2006. But, Freddie Mac reported that the percentage of loans 90 days or more past due and in foreclosure rose to 2.95% in July 2009, up from 1.01% a year ago. We have to take a look at the price range of homes going into foreclosure and who the buyers of these homes are.

Subprime mortgages have been leading the default surge since early 2007. Their prices, mostly REO properties, have dropped so significantly that investors with cash have started buying them up because they will cash flow as a rental, even if prices continue to decline. They can get a rental return of $500-700/month on a home that only cost them $35,000. That's a better return than most stocks, CD's or other paper assets. But is this up tick in purchasing really a sign that the housing market is improving? What about the Prime Loan market and Jumbo Loans? Since February 2009, default and foreclosure rates on option ARMs have passed those of subprime mortgages, according to the research firm First American Corelogic. Many option ARMs are not eligible for refinancing and because they tend to have higher balances, compared to subprime loans, resets often double the payments. First American Corelogic anticipates 600,000 option ARMs will reset in the next four years and Diana Olick of CNBC believes it will be even higher, at over a million. What impact do you think this will have on the prices of homes overall when higher priced properties going into default are increasing and financing of jumbo loans is still extremely difficult to get?

Don't let a couple of months of home price increases fool you in to believing that the housing crisis is over and recovery is on the way, at least not yet. There are still several factors that would indicate otherwise.

If you have a home to sell and you have it on the market VACANT, Arizona Vacant Home Solutions offers a FREE service that will give you the edge you need to sell more quickly, and bring a higher price at closing, in this competitive market. Read about it on: http://azvacanthomesolutions.com/ than contact us to discuss what we can do for you.

Banks Hiding Tsunami of Foreclosures

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Vacant homes are a huge problem in all neighborhoods. Please read enclosed article from USA today http://www.usatoday.com/news/nation/2007-07-01mosquitos_N.htm . How can you solve this issue? Keeping homes occupied and the home maintained is number one, also if you plan to move or have neighbor's who are selling and they need to have the home occupied please check out our free services to homeowners at www.azvacanthomesolutions.com.