As a general rule, indoor pipes don’t break in the absence of external damage. Water leaks usually occur at joints. Your plumbing contractor can do a pressure test to find leaks. If you are expecting leaks, then adjust your offer accordingly. It really is not that expensive a job compared to the discount you can negotiate in your purchase price.
Dave,
Totally understand your point from the mitigation dept side when presented with offers. Clearly makes sense and is much smoother and more efficient for the banks trying to sell there backed up inventories of REO's. Would you agree that its best to stay away from properties with severe foundation problems or extensive roof truss damage. Because even if you are getting 60-70 LTV's, it would surely off set your bottom line, yes?
on paper - an reo is still an asset. rather than take a loss in a given quarter - showing “assets” on the books can work to a banks advantage. banks don’t necessarily want reo’s - they don’t at all, but they’re also not just going to give them away either.
TMCG - although I agree that a property is an asset on a bank’s balance sheet, please don’t forget that there are assets and assets. A property owned by a bank is not generating any return for the bank. So in most cases banks would rather unload the asset and get another asset (cash) that will generate a return. What would you prefer to have a 100k asset that is not generating any return (and actually is costing you - taxes, insurance, and other miscellaneous carrying costs), or to have 70k cash that you can put to work and generate a return?
Another thing to consider is that in some cases banks need cash - so they would sell property at a huge discount because they need the cash.
Have a good evening!
If the property needs major structural repair, it is one I would pass on. Others will use the structural defects to negotiate a higher discount.