Shoppers should exercise caution when buying bank-owned homes

Q: There are several bank-owned properties on the market that can be scooped up with fantastic prices. I know I will need to hire an inspector, since most of these homes are sold in "as is" condition. What type of questions should I be sure to cover with the inspector? Are there areas that inspectors don't look at? - Claudia P., Las Vegas

A: First of all, I think you're right about recognizing an opportunity in our current housing market. Here in Southern Nevada, there are certainly bargains to be had in buying bank-owned homes. But you should be educated before buying.

It sounds like you've done some homework since you recognize that you should hire a qualified home inspector. This is a wise decision.

You, as the buyer, and your Realtor should prepare a list of questions to ask your inspector. As you may know, some of the bank-owned properties listed for sale have no disclosures at all. When they say they are selling the home "as is," they really mean it.

That means you may be buying a property at what appears to be a really good price, but unforeseen issues may be brought to light by an inspection. For example, an inspector may uncover plumbing or electrical problems, which can be difficult to detect just by walking through a home. An inspection may even find mold in the home, which can be a health hazard.

The bank that now owns this home may not know about such issues, so did not disclose them when listing the property for sale.

It's also possible that an inspector may miss some of these potential problems or needed repairs.

Then, a few months after buying a home you thought was a bargain, you could find yourself paying a remediation company to take care of a costly mold problem in the walls of the home. That's never pleasant -- or good for the value of the home.

So, I suppose the best advice I can offer is to look carefully at homes that seem to be a great deal. Do more homework than you normally would. Start by hiring the best available inspector with good references and a strong track record of being thorough and of inspecting bank-owned homes.

At least then, you've done your due diligence and greatly minimized the chances of uncovering any unpleasant surprises.

Patty Kelley is president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 30 years. GLVAR has nearly 16,000 members. To ask Kelley a question, e-mail her at ask@glvar.org.