REO homes can be profitable investment properties. You stand to get a better price than buying a resale property. You can use real estate comps to justify your offers of course. You want to make sure that the condition of the property matches the great price. The best way to do this is through a home inspection.
There are several potential problem spots you should check when you’re considering REOs. Hiring a home inspector is a wise choice, they can do a thorough inspection and give you a detailed report on the condition of the property. You may be pleasantly surprised to get a report stating that everything is in great shape. If you get a less positive home inspection report, it can help you determine whether the property is right for you.
Some of the main things that an inspector will check for are mold, gutter problems, and attic issues. Mold isn’t always visible to the naked eye, but it is difficult to get rid of. Basements and any rooms that are damp or have had leaks in the past, and in the attic, where insulation can become moldy after a roof leak should be inspected. Gutters should be large enough and properly installed so water doesn’t overflow and run under the roof or down the wall of the house, which will cause moisture problems in the basement or foundation.
Lastly, the attic can be the location for a number of issues, including inadequate ventilation, trusses that are the wrong size or even missing, roof leaks, poor insulation, faulty wiring, or home for small animals.
Being cautious and ordering a home inspection can save you money in the long run. REO investments are always potentially profitable as long as you do things the right way. A few hundred dollars spent on an inpection may turn out to be the best money invested yet!