[rightonbro]

I'm hoping I could get some opinions from some of the regulars involved in real estate. Earlier this week, I toured a bank-owned house in Summerlin. Great location, great view, large lot. Interior is immaculate for a 10-year old house - new flooring throughout, new master bathroom, new appliances. House was on the market for a little under a year with a recent price drop that made it competitive, so we figured that bank initially listed high, then renovated and dropped the price to get rid of it.

I was going to meet my agent tomorrow to write up an offer, and then got a call from her. The listing agent told her the house had been completely flooded, and the bank spent $35k repairing it. All of the mold checks passed and listing agent says they caught it in time, and have the paperwork to prove it. Oh, and someone stole the air conditioners three weeks ago (lol).

There is one other offer out on the house. We don't know what it is but the listing agent said to give it a shot anyway. I'm going to look at it again to see if I can figure out where the flooding occured, and then take it from there. I think it may have been both floors since the both floors were redone, which sounds like the flooding started upstairs.

Would love to get your opinions on:

1. How will this affect my resale value when it comes time to sell? (Not anytime soon as I plan to live here.) Do you tend to see a lot of buyers get scared away by something like this?

2. I've read (on the Internets) that this type of repair with mold checks etc. doesn't necessarily have an impact on the sale price of the house as long as everything checks out okay. Do you see this in your practice, and if not, what percentage do you feel could be taken off the list price for this reason?

3. Do you think this type of repair is safe and makes a habitable house? The argument presented to me is that I'd essentially be getting a brand new house. However, I sort of think of it like a salvage title car.

My comfort level is such that if I could verify all of the renovation paperwork, get some sort of guarantee/warranty that I could pass onto a buyer when I'm done living there, and also get a total bargain on the property, it would be worth it. It's a really nice house and as long as I'm not going to die from toxic mold, it would be a great place to live. Otherwise, I'm feeling there's too many listings out there right now to chance something like this and am perfectly ready to pass and keep looking.

Also, as an unrelated question - do you feel that older homes in The Lakes are going to hold resale value? My backup option is a house built there in the mid-80s in a mature and beautiful neighborhood where neighbors seem to have pride. Pricing seems kind of high (like $130/sqft.) and am worried that resale in this area isn't going to hold as new construction comes online at similar price points. Do you feel The Lakes is exclusive and unique enough to hold its price?

Thanks for any and all thoughts!

[lvkewlkid]

its not exclusive but its definitely unique, yes there is not much like it in las vegas so it will hold up...

[PinkString]

If it were me, I would skip the house that had flooded and go straight to The Lakes. The Lakes is an older but well established area, and home prices aren't too cheap there. It's still newer than other more established area's and has an elegance to it.

[LiveinPA]

Mold can be insidious...it may pass the "mold check" now but even a small amount of mold lurking somewhere can multiply and spread. If your house is covered in black mold in 5 years you'll be out of luck because it supposedly was clean when they sold it to you...not to mention that bank owned is probably sold "as is".

In addition, you'll want flood insurance since it's happened before...and will probably happen again even if it's years between.

With all the homes for sale in Vegas I would pass...it's a buyers' market.

[airics]

the flooding was probably from the previous owner, so flood insurance doesnt cover.. and if you are buying a bank owned home, i think you have to sign a waiver about the mold.. the house is sold completely as is...
as for me buying the house, what are the other houses in the area doing in terms of price, if this is only 10k under than skip it.... i would lowball them big time... can't hurt...20% under list.

[rightonbro]

Thanks for replying everyone! Update: We called the listing agent this morning. Apparently the flooding started with an upstairs toilet and went through the entire house - stairs and garage included. The $35k in repairs covered the entire home. No structural damage and the house was mold tested and then retested, so any mold that occurs from sale afterwards would be my responsibility.

Went to view the house again. It still looks immaculate although I'm starting to see some issues with fit/finish. Most of it revolves around where the ceiling meets the floor - some things that could be fixed with kickboards and/or grouting. Sprinkler system is working but some of it is exposed and there is at least one leak. There are some things like missing shelves but I don't think that is a totally big deal either.

LiveinPA: House is indeed sold as-is, although my agent says we can get them to throw a warranty in. Does this make sense to cover this type of potential mold issue?

airics: Agent says it's a great deal at 10-20k under list and that the water damage isn't an issue. I'm guessing you agree on the water damage thing (as long as it passes inspection), is that correct? I tend to agree, so I think I am going to lowball and walk if it's rejected. I like the house but not that much.

[mikestate]

I'd be worried about a flood so deep that it reached your second floor. That sounds Katrina like in retrospect.
I would contact the cities engeineers or the USGS about this and it's relationship to the drainage issues and runoff fron the lakes. Or maybe you could write your congressman and see if they could channel some of that 700 billion towards your neighborhood and build an Ark for the next time it rains like that in Las Vegas, it seems a worthy project and I'd love to see someone, ANYONE, benefit from a 3/4 of a trillion dollar expediture of taxpayer money, somebody real, not just Wall Street but somebody flesh and blood, even you and your neighbors.

[olecapt]

Slowly slowly. No flood. Toilet failure. Soaked all the carpets and lower walls likely upstairs and down if the house is occupied and a bad leak has only a few hours it is a 10 grand problem. If it has a few days you basically have to junk all floor coversing and the bottom couple of feet of the walls. That gets into the $35K range.

If you actually get mold on the walls you have to strip the interior and get up towards 100K dependent on how big the house is.

I would expect a discount from the fair market of about 20%. So you figure the REPO price and then another 20%. That is basically what you get nailed for when you sell. Eventually it will drop to a small number in say ten years. But it is perpetually reportable in Nevada.

I don't believe it really has any effect on the house other than nice new flooring. It does impact resale value though.

I would also have a mold test run. Cost around $500. I never trust the other side.

Mold is likely not a problem. You simply do not get mold without a water source. It does not reoccur unless there is another leak.

Another point for all. All flexible hosing in a home should be the armored metallic braid stuff. A leak is simply too expensive to deal with. Note that an RO unit can also do such a thing and should be turned off if the house is vacant for any long period.

Home warrantees have no impact. I would be skeptical of warrantees by the contractor or remediatior. They do not have long business lifes.

[airics]

i also think warranties are worthless....i would definitely get the mold test.. and a complete inspection.. i also look at it like this.. this house is in summerlin, which people want.... why didn't anyone buy this house previously... it may have been way over priced or something else is fishy!

[olecapt]

Originally Posted by airics

i also think warranties are worthless....i would definitely get the mold test.. and a complete inspection.. i also look at it like this.. this house is in summerlin, which people want.... why didn't anyone buy this house previously... it may have been way over priced or something else is fishy!

Summerlin does not sell all that well in this market. Price is too high even with REPO etc. Probably twice the relative inventory of the NW.