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With the housing market as it is, some us may have the opportunity and/or desire to look at a house on the market as a short sale or because of foreclosure. They are fixer upper likely, in some cases, now a Real Estate Owned (aka REO) property.
Unfortunately these kinds of properties are often “as is” sales. And depending on how the house will be sold (auction or other), it often doesn’t allow for a proper home inspection.
Beyond that, you usually won’t have the luxury of time when looking at REO property. In other words, you must be prepared to move fast. Because of this, we created a short “home inspection” checklist, of sorts. DIY tips to keep in mind while inspecting that bank-owned property.
This list in no way replaces a home inspection from a licensed professional. If you have the time, and budget, by all means get an inspector in. That said, it does present a couple of things you might look for, and at, when decided to buy a bank-owned property. It should only take about 15 minutes to perform.
Let’s Start – What You Should Know Going In
If the house was built before 1978, you can assume the home has lead in, on and/or around it. Be on the look out for asbestos too. But if you plan to full-on renovate (as is often the case), these may be of lesser concerns. In the grand scheme, they may only add minimal but not necessarily nominal costs to your remodel.
Here in Maryland, and I assume in other states, things like Year Built, Acreage, Number of Baths, Room Sizes, etc. are a matter of public record. Various real estate sites too might also provide access to this info and other info – like heating fuel, etc.
That being said, much of your analysis will come both before and after your inspection. So when you actually gain access to the property, be focused and be prepared.
Grab These Items for your DIY Home Inspection:
- Digital camera / Smart phone (Great for collecting and reviewing info later.)
- Good flashlight (w/ fresh batteries or fully charged)
- Flat Head and Phillips Head screwdrivers
- Channellocks (various sizes)
- Mold testing kit (available at Home Depot or Lowes for few bucks).
- Tape Measure (just in case you need to quickly calculate clearances.).
A Few Days Before the Inspection
This assumes again that you have seen the house, and are happy with its (potential) make-up. This also assumes that the house has public water and sewage. (A house on well water and septic might require a different set of considerations.)
Note: As you do a few, your list of go-to tools might grow beyond this starter list.
For lots of reasons, make sure that the main house water and power supplies are on or can be turned on! Request this via the bank, broker, etc.
Know and check the recent weather forecast. Has it rained, snowed, sleeted? Will it?
Lots of termite damage — near sill (+ wiring crossing joists)
Basement
Start in the basement. Look for visible signs of water. From the inside, what does the foundation look like? Look Up! Find exposed plumbing – are there leaks? Find exposed wiring – what is its condition?
With limited time, and for the most bang for your buck, find the mechanical room.
— HVAC, Plumbing & Electrical
Locate furnace/boiler, hot water heater, etc. Labels on most tell when appliances were manufactured or when systems were installed (part of the serial numbers sometimes). Check on the inside of covers, in the breaker box, etc. for as much information as possible. Take pictures.
A look behind the wall — hall bath tub with galvanized pipes
— Try to the note, if you can, the type of plumbing supply lines. If it has copper, plastic (CPVC) or newer PEX – Good. Silver (galvanized steel or iron) bad (will eventually need to be replaced).
— Try to note, if you can, type of electrical wiring. This may not be an issue if you consider age of the house. Basically, want to see modern Romex-style wiring (pictured below).
12-gauge Romex wire colored yellow in recent years; 14-gauge white
— Structural
— Still in the basement again, look up. Try to locate some exposed floor joints near outside walls. Inspect for noticeable termite activity or damage. If you see signs of termite treatment, that is good. (Even even if you don’t see damage, still a good idea to budget for a professional treatment.)
— Foundation, Foundation, Foundation. If you can see the foundation, do a visual inspection. Try to note type. Long vertical cracks can be bad especially if you see anything that would indicate water penetration (discoloring, dirt, soil, clay, etc.). Pull out that mold testing kit if any of those signs appear need drywall, wood, carpeting or other “organic” materials.
Foundation cracks may not be the end of the world, but look for areas where the material has shifted out of plane (could indicate a structural issue).
— In general, look for signs of water damage/penetration, etc. – signs listed above. (Yep, so important I said it again.) Is there a sump pump, does it seem to work? If yes, this is good.
Water is a houses enemy. And basement waterproofing can be a pricey endeavor. So you definitely can’t spent too much time knowing what you might be getting into.
Roof
After the basement, head directly to the top floor (hopefully an unfinished attic). Look up at the underside of the roof. (Yes I know you may have to gain access in some other way.) Are there any signs of water damage? Moisture (or worse, water), discoloration, etc? Again, when was the last time it rained? Are surfaces damp?
Try to to inspect the ridge and edges of the roof. Discoloration in itself may not be deal broker. Most roofs over time can show signs of a leak that is later repaired.
Of course, you’ll also inspect the roof from the outside the best you can.
Interior
— Does heat and air conditioning work? Again, you’ll need the power on for this. Since you are in a rush also, you may not be in the home long enough for the thermostat to satisfy. With gas or oil boilers/furnace, can you hear them firing (often back in that mechanical room). Does this set smoke or carbon monoxide alarms off if they are present?
Verifying AC in colder months may be challenging, but does the AC’s outside unit come on when cooling is requested?
— Check a couple of the plumbing fixtures, under sinks, etc. Are there signs of bad pressure, leaks or anything like that? Rusty or dirty water may not be the end of the world – especially if the house isn’t occupied. More concerning, if you discovered galvanized pipes (above). Consequently, let the water run as long as you can.
— Do any of the floors show signs of significant deflection? Do they show signs of dips bigger than an inch? In rooms where there is carpet, use your Channellocks to grab and peel back a corner. What’s underneath? Hardwood – that might be good thing.
— Are there any extremely large cracks in walls?
— Check a couple of windows and a couple of the doors to make sure they open and shut and lock, etc. Note that the last two items also help determine the structural soundness of the home.
— Are there appliances in the house? Do they work?
Use your common sense. Note anything unusual.
Exterior
— Do a quick visual inspection of the roof, siding, and the trim around it. You can tell a lot from looking at the roof from the ground. Missing shingles, aluminum/vinyl siding and trim. These are sure signs of possible water entry.
— If there is an air conditioning compressor – check its sticker. Take a picture.
— Check the grade around the house. You want fall away from the house and the first floor separated from the earth. These are good things for many reasons.
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Organizing Your Information + Final Notes on Our 15 Minute DIY Home Inspection
Times up! As you can see 15 minutes in a house can give you a lot of information. Now you just need to organize and review it (usually with a partner). I often find that Google Sheets (like Excel) works just fine for entering my info and cross-referencing my downloaded photos.
– Home Inspection Reports
Obviously, there is a ton more that a professional home inspector could find. (After all, they get paid to find stuff.) Inspectors often do have both a better eye and also for-real home inspection checklists. That said – if you have had a home inspection report done for you previously, refer to it in this process. You could always also use this as a guide.
With the advent of mobile tech, too, there are a number of DIY Home Inspection Apps now in the app stores. This one from All State looks very cool. While designed as a home insurance aid, it may possibly be repurposed for our means.
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Checking these things can help you prepare for a lot of things. And can ultimately help you decide whether or not you’ll buy that REO property. For much more on all these house systems, please check the related categories on this site: Basement, Roofing, Interior and Exterior.
For more information on what to expect from a professional home inspection, this looks like a good article from Angi’s – What’s Included in a Home Inspection Report. Thanks. ~jb