I recently sold a Hud home to a client, we looked at about 20 hud homes, found one to their liking, put in a bid and it was accepted! Great, on to the inspections right? Not so fast, before we even get the inspection scheduled, we receive a lead based paint report regarding lead paint on an exterior garage window, so I meet my client at the house to take a look, as we really didn't pay that much attention to the garage window on our previous showings. Hud said they were going to take care of the deteriorated lead paint, but we thought we should take a look at the window anyways.
We get to the property, walk in the back yard and...... the central air unit is gone! Wires cut, coils removed .... unbelievable! 
Well not really, I see this kind of stuff all the time with bank owned homes, but the frustrating part is, this homes been on the market for almost 4 months and no vandalism, no theft and now we have an accepted offer and someone comes and steals the central air unit, what the heck.
I contact hud and do as they ask - take pictures, email them the date and times we notice it missing, attempt to make a police report, ( we cannot file a report as we are not the owners),and get a written estimate.
After I don't know how manyemails and phone calls, we still don't have an answer as to what they will do for us. A price reduction? A credit? An escrow for a new a/c unit. After a month, we talked to hud, and they agree to let us withdraw / cancel our offer. I explain to my buyer, there are 3 choices, we go ahead with the sale and gamble that they will credit us for the a/c, we wait it out for an answer and continue calling and making sure they don't forget about us, or we withdraw our offer and move on. My buyers very frustrated and doesn't want to wait any longer for an answer. At this point in time we should be near closing. So I cancel our offer and it's back to the drawing board.
The same day I find a new hud listing that just came on the market, and my buyer likes this one even better and it's at a better price! We submit a bid, and great news, they accepted our offer! Planning inspections later this week, this one has a pretty very old looking air conditioner, so I don't think we'll have to worry about this one getting stolen, but you never know.
There are some good deals on some of these bank owned properties, but this is some of the stuff that you have to deal with, they're not like buying a home from a private owned seller. Anyways, my clients happy and is getting a good deal, that first one just wasn't meant to be.
Mike Mitchell - REALTOR ®
GMAC The Kee Group
Direct: (586)291-2652
With all of the foreclosures and HUD homes on the market this will probably become more prevalent. Sad but true.
Mike, I ran into missing plumbing the other day. Thankfully before the offer was written.
What I've been doing is this: Taking photos (date stamped) on the day that the offer is written. If there are any changes to the home prior to closing I had it documented. Also, I've been insisting that the final walk through be done the day of closing and not in the preceding days.
Those darned HUD homes all have the same key to enter. Not too hard for theives to make copies, or simply steal from the outside of the homes.
Sorry this happened to your clients, but I'm thrilled they were able to move on to another home. BTW, if you don't mind me asking, how long was it before you got the earnest money back?
Ellie - it is a sign of the times and yes, sad but true
Kris - I always seem to run into missing plumbing, like I said, the frustrating part was this was on the market for so long and then this happens after our offer.
They told us 78 hours to get a release of the emd, and we did get the release but I was calling and emailing on that 3rd day to make sure.
Anytime you deal with bank-owned properties...there is a risk of a headache. That is the price the buyer (as the agents) pay for the 'good deal'. I try to warn my clients that buying a bank-owned property is not going to be like dealing with an individual owner...so that they have the proper expectations going into the transaction. Still...most of the time...they seem to be frustrated when something does go wrong...like this. You handled it the best you could. I'm glad you were able to find them an even better home. GBU!
Hi Elizabeth - I always warn my clients too, but this one surprised me because it was after our signed contract. Never a dull moment! Thanks for your comments.
We have 2 personal accounts with this Mike - back in summer the day of closing Jeff had to call out the Sheriff's to make a police report on a home that was to close in several hours! It was vacant but the a/c was ok during all the inspections and appraisals etc...(this private seller had no problem & escrow ed money for a new A/C- which was a better deal for the buyer since the one stolen was old)... the copper in it apparently is expensive.
Also, our church had the A/c unit disassembled and the inners were stolen (stealing from a church? double whammy!
Our new Church building plans include placing the A/c units on the roof - until then a structure to cover it and lock will have to do.
glad for you that in the end your buyer got another home!
Sincerely,
Grace
Thanks for the post Mike,
Unfortunately we'll prob. be seeing more & more of this....especially in the hard hit areas
Hey Mike
I don't think the fact that it's old will keep it from being stolen, its just the components they want for scrap. Keep your fingers crossed.
Just about every one of bank-owned properties are in need of extensive repairs. However, many of them have "value added" features since they are in good neighborhoods and they can be purchased well below comparable market value of existing homes. The key is knowing how much you'll have to put into Restoration and determine if the deal would be a good investment.
We have seen this a lot in businesses over the past several years and it is now spreading to homes that are vacant.
Grace- at least it was a private seller and you were able to get it escrowed. That's all we wanted, but I think we'd still be waiting for an answer if we hadn't moved on.
I've heard of it happening to churches on the news also. How can anyone steal from a church?
Eric - sign of the times I guess. What a shame.
Terry - good point. This one is so old and small, I never seen one this small, I think we're safe, but I'll still keep my fingers crossed!
Jon - thanks for your comments. There are some great deals out there.
Kim - same here. I'm used to the copper plumbing being stolen, I've seen that happen so many times. Thanks for stopping by and commenting.
Hi Mike, So happy to hear that all finally worked out well for you and your buyers found a home they liked better. 2 weeks ago the outside A/C unit was stolen on one of my empty rental homes (2 days before the new tenant was moving in) and the empty rental next door. Same thing - A/C stripped out of them. You know they only get about $35 for those coils? Just put a new outside unit in $1500 later! Ugh! It's happening all over the country.
It's great that you were able to find another home for your client so quickly. I am seeing a good number of REOs here that state the AC unit will be installed after closing. I guess they are taking them out to avoid this? Or maybe they were already ripped out. I looked at 2 the other day where the electrical wiring had been stripped out from the circuit box. There was extensive drywall damage due to the wires being pulled out.
Sandy - guess I'm not alone. $1500 that's a bummer. The quote I got was actually higher than that @ $2,000. Thanks for stopping by and commenting.
Pam - They were probably already ripped out. No sense putting in new ones while it's still vacant. Thats all we wanted was an answer, we would have been fine with a new a/c after close. Thanks for your comments.