The Foreclosure Transaction and what to know - part 3

SPDS?  Mashed potatoes?

No, SPDS are an acronym for Sellers Property Disclosure Statement.

A foreclosed property will not have SPDS available.

SPDS are like the personal diary of a home.

The seller of a home normally provides this.  A normal seller will be co-operative and happy to give a buyer all the information possible.  A foreclosure sale does not usually have a co-operative seller, but usually an unhappy angry one who definitely isn’t interested in helping the bank or the buyer.

The  7 pages of the SPDS cover questions from plumbing or electrical problems to the presence of scorpions & name of the gas company.  The surrounding area information, such as the property being in the flight path for a nearby airport is also included.      You can imagine the importance of such a document to answer so many questions…..”Is that stain from an old roof leak?  Was it repaired?”.    “Has this home had it’s HVAC system checked annually?”  “Was this addition done with a permit? Did a licensed contractor do it? Who did it?”  “Who has been taking care of this pool?”  “When was this ………….. (fill in the blank) done?”

There are many sources to be checked for the answers to most of the questions asked on the SPDS,   The Buyer Advisory by the Arizona Association of Realtors contains sources that a buyer may use for information about a property and the neighborhood itself.

We give all of our clients a copy of this important document.

The Foreclosure Transaction and what to know - part 1

The Foreclosure Transaction and what to know - part 2

The Foreclosure Transaction and what to know - part 2

Why the lack of a CLUE insurance report in a bank owned property affects you.

A CLUE report is an insurance claims history issued by the insurance company of the home seller. It is normally provided by the seller of a home and given to the buyer during the first 5 days of the inspection period.  It requires the Social Security Number of the home seller so only they can request it.  

If a property has been recently foreclosed on, the bank has not had it insured but for a few weeks, if that, so they will not have one.   It is important that the buyer contact their insurance agent during the inspection period.  There is a central site that records all insurance claims on all homes, your insurance agent can access that site for an insurance history for you. 

Why is that important to you?    It will determine if you will be able to insure the property and what your rate will be.  Your insurance company has 59 days from when you purchase a policy in which to cancel that policy!!    They determine that cancellation  based on the possibility of future claims of a similar type to those in the past.  This is why you want your insurance company to access that history right up front, not in 59 days.

If the property has had severe water damage claims you will want to inspect those areas more carefully for mold.   Mold is a big bad four letter word that terrifies insurance companies.   If the property has had several break-ins,  you might want to have a security system installed.  Has the  home had a major fire?  There are all sorts of good reasons to know the insurance history of the property.

Also check out these posts:

The Foreclosure Transaction and what to know - part 1

The Foreclosure Transaction and what to know - part 3

 

 

a Sun Canyon foreclosure in Scottsdale’s McCormick Ranch

This bank owned 2 bedroom 2 bath 1342 sq ft single level second floor apartment style town home with a one car garage is priced at $218,500. Located in the attractive community of Sun Canyon in McCormick Ranch , it has vaulted ceilings, a fireplace, lots of windows giving an abundance of light. The master suite has a large bathroom just calling out to be redesigned. . The kitchen has original cabinets painted white, tile countertops and all the appliances. The patio is a good size. The carpet might not clean up and have to be replaced, otherwise this is one foreclosure to be grabbed and run away with.

The closest comparable property, identical floor plan, also upstairs was priced at $275k. Others in the complex go up to $299k for the same floor plan

The one at $275k has oak cabinets & the same tile countertops as the foreclosure. It has very nice looking wood flooring in the kitchen. The carpet is aqua and

would probably have to go, so to me there is no way a wood floor and wood cabinets are worth $57k when the foreclosure is available. It would however look good without the foreclosure.

To find out more about this property or others give me a call on my toll free 1-877-579-7129

Renovations at the Scottsdale Pavilions

The Scottsdale Pavilions shopping center is being renovated.  YIPEE!  It was purchased in January of this year by De Rito Partners Development and all it takes is a drive thru the center to see the changes being made.  New paint, resurfacing of the parking lots, and a whole new look.

I recently received a post card asking for me to complete their web based survey.  It takes about 10 min.  The asked about different stores, events and changes I would like to see, as well as what businesses I currently use most often.  I was happy to see they are going to address the dip in the intersection at Pima and Indian Bend as part of the update.

If you live in the neighborhood, take a few min, give your feedback, and as a bonus you will receive 2 movie tickets.

 

"The Cat House"… or when a good home goes bad

Posted by Claudina:

I purchased a home a few years ago that had a lot of cats living in it. I felt like I stole it the price was so low and I bought it “as is” with intention of doing a total remodel..    I have never owned a cat so I figured, no problem, tear out the carpets and use a little Clorox on the cement under it and we will be ready to go.   Not so.  The cats had sprayed, not just piddled.  I didn’t know about cats spraying.  They can spray up to 3 ft high.   We tried scrubbing it down with Clorox…pool strength, we tried a magic ozone light, we tried every remedy suggested to us by our many helpful friends.  They called it “The Cat House”

What did we do?  Finally we tore out every single piece of wood trim, the door frames & baseboards, the cabinets , windowsills and even the doors.  We then cut the wallboard off at the 4 ft mark, everywhere!!.  We removed the insulation from the outside walls, washed the 2×4s  with all sorts of deodorizing stuff.  Mostly more Clorox, my cure all for smells.  Eventually  we ended up spraying many gallons of Kilz, my second step cure, on the 2 x 4s and in the spaces, put in new insulation and  new wallboard. I got pretty good with tape, and  a trowel that year.   Even the electric outlets had to be changed they were all so corroded.  We then tiled every square inch of the floors.  Oh, we had to pull all the insulation out of the attic crawl space and replace all the ducting for the a/c!  The little rascals had played up there too and ripped the ducts to shreds.  For as long as I lived in that house when the humidity got high I swore I smelled cat urine.  I did get even with the other agent, I got him to appear and pick up the cat urine soaked seller in his new Mercedes to go to the closing.  He had refused to even step into the house after the listing was signed. I did my walk thru and he waited outside.  He had to get it detailed after taking the seller for that ride  and  he reminded me of it every time we crossed paths.

Foreclosure and Auction at Rancho Antigua Condominiums

Located off Mountain View Rd just to the west of the 101, Rancho Antigua Condominiums are a conversion that didn’t get quite complete. The developer has 18 units going up for auction scheduled for November 6^th, with prices from $200k to $395k.  (check out the auction site)

The foreclosure located in Scottsdale’s  Rancho Antigua is priced at $244,900 this 3 bedroom 1609 sq ft condo conversion doesn’t stand a chance of selling for a while.   The developer has just placed all unsold units on the auction block.  at an absolute sale.  The list price on the developers units for this sq. ft. is $200k.    

So here is another one that just doesn’t make the cut.

If you would like more information on these properties or any others contact me Irene@I-Hammond.com

 

 

 

The Foreclosure Transaction and what to know - part 1

Foreclosures are sold “as is”, which translates to “the seller is gone and we (the bank) don’t know anything about this property and we will not do anything if we find something amiss, you inspect it and either take it or leave it”.

It is the giant red flag telling sellers to be very careful and to get the best help they can in purchasing this home.

The basic home inspection:

You are permitted to do whatever inspections you wish on the foreclosure property.

The purpose of these inspections is not to find items for the seller to repair, but to find out what you as the prospective owner will have to repair.  Will the repairs found to be needed exceed your budget?

The general home inspector may suggest that a specialist in a specific field be called upon to further evaluate a situation.  It may be the air conditioner, the roof, the plumbing or wiring or any other system or situation. The home inspector does not give estimates for repair so if you require replacing or repairing anything, you will need time to get a tradesman in for an estimate.

In your purchase contract the standard default for inspection time is 10 days, we suggest you amend the contract to give you 15 days to complete your inspections and determine if you will go thru with the sale.    With the possibility of needing time to contact a specialist, get them to the house and come up with a report, you will want every extra day you can get.  The day count starts with the date of the last signature on the contract.  You may be responsible for turning on the utilities for the inspection, even though the contract may say that it is the seller’s job.    That takes a few days.  The gas company will not turn on gas unless someone is at the home to allow them to light the pilot lights, the water company will want someone there for turn on as well.

The bank as sellers will not do anything to correct any problems that have been found, nor do they warrant that there are no additional problems. They may occasionally,  but rarely,  agree to a decrease in price to compensate for the cost of a major repair needed.  They are totally washing their hands of anything to do with the condition of the property.  If termites are found, it is your problem, and it is still your problem even if your lender requires a “clear termite” report or a “clear roof report” (clear meaning that if termites were found they have been treated and if roof leaks were found they have been repaired).

When all the inspection reports are completed and estimates done you will have the opportunity to accept or decline purchasing the property.   If you decline, your deposit will be returned .  If you accept you do so with knowledge of what has been found and no warrants from the seller that there are not problems that are yet to be discovered.

Be sure to read these other posts as well:

The Foreclosure Transaction and what to know - part 2

The Foreclosure Transaction and what to know - part 3

Paseo Village foreclosure home, in Scottsdale’s McCormick Ranch

Posted by Claudina:

In the McCormick Ranch community of Paseo Village there is a foreclosure with 2564 sq ft for $399,900  with 4 bedrooms and 2 baths.  I don’t know what to say about this one. The location is great, it has greenbelt on the rear and side, from the outside and the photos, I was sold, which goes to show you that not everything is as it looks.  You enter to a large formal living room on one side, dining room on the other, there is a fun sunken “conversation pit” in the family room with a beehive fireplace, there is still enough room for another seating area and a big TV.

  The kitchen needs everything.  The master bedroom is very large and the bathroom is big enough for a great remodel and you would have a super master suite.  You have good sized rooms to work with in this home.    The back yard is private and well treed with a diving pool.  The garage needs a new door. But the turn off is that it smells like someone had a whole herd of cats living in it.  The rugs are stained all over with cat urine.  (as you can see in the photo above) If there is anyone out there who has a cat urine removal trick, then this house could be a good buy for them.  I wish them luck. 

We compared this home as best we could with the next closest comparable with 2462 sq ft, 4 bedrooms.   The comp is listed for $474,900.   It is a corner lot, siding to Paseo Del Sur which is a fairly busy interior street.  The most stunning thing about this home was the real wood floors throughout the home.  The kitchen was remodeled, but it really looks like they just put on new doors. The countertops are epoxy cement.  The fireplace in the family room is an artwork in tile.  It has a large back yard with a diving pool.   The two homes are similar in sq. ft., rooms, diving pool and lot size.  I may be prejudiced because of my experiences, but  it is worth $75k to me not to deal with cat odors and I would take on this one.

Be sure to check out the post "The Cat House"… or when a good home goes bad 

 

 

Foreclosure in the town home community of Pleasant Run

This bank owned property is located in the Pleasant Run subdivision of Scottsdale’s McCormick Ranch.   It is a 195 town home subdivision with 2 pools, spas and tennis courts and is an entrance to the Camelback Walk.

The foreclosure is priced at $302,900. It is a   single level with a 1  car garage There are three other properties with identical floor plans in the complex with full 2 car garages and assessor measured sq ft of 1590.  The most comparable one is priced at $333,000, the next at $369,900  and the last at $425,000.   The foreclosure listing erroneously says it has 3 bedrooms and 1702 sq.ft.   The 3^rd room is an office built into half of the garage, no closet, and still has the garage step down.  The floors are tiled except for the bedrooms.  The bathrooms and kitchen are original, the kitchen cabinets are painted and have a Corian type countertop. The big skylight is original.  Roof and A/C system conditions are unknown.  The appliances were stainless and black mixed, the refrigerator is absent. The patio is covered and backs to the community of Santa Fe’s exterior wall.

The most comparable listing to it, priced at $333k has an identical floor plan, tile in the same places, carpet in the bedrooms. The patio on the foreclosure is more open, with half walls.  The comparable has enclosed walls.  Both units are placed well back from Hayden Rd so noise is not a factor.  In the unit for $333k the bathrooms have been updated.  The bathrooms and kitchen have maple cabinets, the kitchen has matched Kitchen-aid appliances and a granite tile countertop.  Since this is not a foreclosure, we have information from the seller saying that the roof , a/c and skylights have all been replaced.

So is this Foreclosure a good buy?   I say not.  The work needed to upgrade it to the level of the comparable will far exceed the $30k price difference.

To find out more about one of these properties, or any other please contact me Irene@I-Hammond.com

Foreclosures in the McCormick Ranch area

I have been getting calls about foreclosure homes.  What a surprise, with what the media talks about all the time.  So I thought I would focus on Foreclosures for a while.  Lets find out if they are a great bargain, or are they too much work and effort for the price. 

Currently in Scottsdale’s McCormick Ranch area, the zip code of 85258, there are a whopping 19 foreclosure properties with a total of 571 active listings currently in the same area.  That is 3.3% of the market.

There is  a wide range in these foreclosures as well.  9 are single family homes, 5 are patio homes and town homes, and 5 are apartment style condos.  They range from a 1 bedroom, one bath 727 square foot condo listed at $113,900: to a 6,584 square foot, acre and a half estate home, with private tennis court, pool, and all the goodies you would expect to find in a $3,150,000 home.

So lets explore the details of the foreclosure market…

 

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