Moldy House Short Sale?
ARV: 145K (with no mold)
1st: $123,714.52, 3 mos. behind - GMAC
2nd @ $22,000.00, current :-( - Beneficial
This family has vacated the house after recurrence of mold. They just want out and are willing to give me the house subject to today. After finding the mold, they replaced the carpet with Pergo. Looks great but mold is still present in all ductwork and spreading to the walls. This is a nice, new house (about '95).
The only way this deal would work is obviously to get both banks to take a substantial short. Any suggestions/ideas/advice? I know very little about short sales and less about mold but I recognize this could be a great opportunity.
My plan so far:
Get them to sign a purchase and sale subto leaving date blank (also contingent upon both the 1st and 2nd notes being discounted or shorted)
Also get them to sign a POA, QCD, Authorization to release, and write two hardship letters, one for each bank. Once I have this, then what? I plan on taking some pictures today after picking up a mask from Lowes. Also, once everything is signed, get some quotes from Mold Remediation Companies.
Anything else I should be doing before calling the bank?
Thank You,
JohnCl
Also,
Do these Mold Remediation Companies offer any sort of warranty/guarantee like a Termite Removal Company would do? And, any trouble getting a Home Warranty?
Any problems with lease optioning this house or would it be better to just sell it off as quickly as possible?
JohnCl
[ Edited by JohnCl on Date 04/24/2004 ]
The mold remediation company should give you a "clean house" certificate. Keep in mind that you will need to disclose the previous presence of mold on your Seller's Property Disclosure. How will this affect your flip selling selling price? Are you going to need to reduce your price from the average market value to compensate for this mold stigmatization? Also, find out what is causing the mold, what kind of mold it is, etc. I would get a few quotes from mold remediation companies before presenting the short sale to the bank, that way you can include the remediation bids with your other documents and the bank will be more likely to take your offer (they don't want to deal with a moldy house). Also, before they put down the Pergo, did they do anything to vapor lock the sub floor? The moldy carpet is a symptom of a bigger problem. Find out where the moisture is and why the mold continues to grow. What kind of sub floor does it have? Is the grade around the perimeter of the house providing adeqaute drainage or is water running towards the foundation? Is there a sprinkler system? If so, is it possible that there is a leak under the home?
Best of luck!
Casey Ellsworth