A foreclosure is a very long process that nobody really wants to occur, so when it does there is often an element of apathy involved. Foreclosures can take years to process as the legal dance waltzes through the backed up local court systems. The result is a property that sits unattended and often falls victim to vandalism, theft, and simple apathy on the part of the bank.
A cottage industry sprung up as a result – the so-called home inspection industry. It is not uncommon for unattended homes in hard-hit areas like Florida to have their doors kicked in, trash litered all over, and infrastructure materials inside missing. As a result, banks often hire these contractors to look over homes and ensure that they are undamaged.
The surge in foreclosures – which now sits at 3% of all homes – has meant good business for those that watch over houses. Individual contractors can often bill as much as $5,000 every two weeks in order to inspect and watch over foreclosed properties. This is a big bill for banks to afford in a time when they have already been hit hard holding all of these homes on their books.
So, what exactly do these contracts do? The first thing they do is document the house when they first arrive and present problems that need attention. They also change the locks on the doors, board up broken windows, cut the grass, and record any significant damages. Banks and mortgage companies are trying to avoid these damages through cash-for-keys programs that allow homeowners to turn over the house in good condition for cash payments.
However, while business may be good, some find it disheartening to work such jobs. After all, someone lived in those houses and now they are just empty and bolted shut.
Many people are afraid that their house will be appraised lower than they thought now that the housing market has turned. However, there are some steps you can use to make sure you get a fair valuation. First, make sure that your lender doesn’t use automated valuation models, but rather sends an actual appraiser to your house.