Smart Decisions in Homebuying are Product of Good Advice
Results from the American Society of Home Inspectors' 2008 Foreclosure Study Show Buyers Are Not Compromising Quality for Big Discounts
Des Plaines, Ill. (November 13, 2008) - As the number of foreclosed homes grows, so too does the population of potential buyers. Buying a foreclosed home used to be considered a risky investment left for a few real estate "daredevils," but a new national consumer survey commissioned by the American Society of Home Inspectors (ASHI) shows that more American homebuyers are warming up to the idea.
In fact, two-thirds (66 percent) of the U.S. adult population would consider purchasing a foreclosed home, according to the survey conducted in September 2008 by Synovate, a Chicago-based research firm. However, most potential buyers would only do so after hiring a home inspector to identify and/or avoid any significant problems.
What's driving the new interest? Low prices. Data from the RealtyTrac Information Centers, the leading online marketplace for foreclosure properties, indicates that the average sale price of a foreclosed home in this country is hovering around $160,000 - nearly a 30 percent discount from the average market price.
Despite the significantly reduced cost of foreclosed homes, buyers are hesitant to rush into a purchase simply to lock in at bargain rates. Less than 10 percent of the consumers surveyed said they would forego a home inspection even if a 30 percent purchase price reduction was offered. In fact, among neighborhood, crime rate and property taxes, homebuyers consider the results of a home inspection one of the most influential factors when deciding whether to purchase a home. The survey revealed that, outside of a spouse, a home inspector's opinion is more influential than anyone else's — real estate professionals, parents, contractors and mortgage lenders — when choosing a home to purchase.
"It's reassuring to see that buyers recognize the value of a home inspection conducted by a qualified home inspector," said Brion Grant, 2008 president of the American Society of Home Inspectors. "Even at a bargain basement price, a home with major defects is not the good deal it seems."
Like any other pre-owned property, foreclosed homes often have wear and tear from their previous owners. But, as Grant has observed, foreclosed homes often need more costly repairs. One likely explanation of this is that as the homeowners struggle to pay their mortgages and other major bills, often there is no money left to cover necessary home maintenance, upkeep and repairs. Furthermore, a house that remains unoccupied for an extended period is subject to vandalism. Even homeowner destruction to retaliate for being forced out may negate a clearance price tag.
Other notable statistics from the survey
- Everybody has their price. Fifty percent of buyers would forego a home inspection for a 50 percent discount off the purchase price.
- Half of the population named mold detection as the condition most likely to prevent a prospective buyer from purchasing a home.
- Most buyers feel unqualified, compared to a home inspector, to evaluate the condition of a home.
- More than seven in 10 of buyers ages 18-24 feel unqualified
- Two-thirds (67 percent) of female buyers feel unqualified
- Men over the age of 55 were the most confident in their ability to evaluate the condition of a home, compared to a home inspector
Locate an ASHI Certified Inspector
Grant urges homebuyers — especially first time homebuyers — to enlist the help of an ASHI inspector to identify major defects and potential safety or maintenance issues that could spell trouble over the long haul. ASHI Certified Inspectors are experienced and have passed a written exam demonstrating the technical expertise needed to help potential buyers better understand the condition of a home before making a purchase. Buyers interested in purchasing a foreclosed home can schedule an inspection with an ASHI Certified Inspector by visiting ASHI's Web site, www.ASHI.org. By clicking on the "Find an Inspector" tool, homeowners can locate a local ASHI Certified Inspector and quickly place a call or send an e-mail.
About the American Society of Home Inspectors
In its 32nd year and with nearly 5,500 members, ASHI is the oldest and most widely recognized non-profit, professional organization of home inspectors in North America. Its Standards of Practice and Code of Ethics are the industry standard. ASHI’s mission is to meet the needs of its membership and promote excellence and exemplary practice within the profession. For more information, visit www.ASHI.org or call 800-743-2744.
To become an ASHI Certified Inspector, ASHI members must pass two written tests, including the National Home Inspectors Examination, and have performed a minimum of 250 professional fee-paid inspections conducted in accordance with ASHI’s Standards of Practice and subscribe to the Code of Ethics. ASHI Certified Inspectors are also required to obtain 20 continuing education credits per year to keep current with the latest in building technology, materials and professional skills.