Buying or flipping a foreclosed property?  

An Unfortunate Event

During difficult economic times, home foreclosures are common.  A foreclosure is a sad and emotional event for those losing their homes, as well as a burden for the lending institutions that receive the properties back and then must resell them.


Some disgruntled homeowners strip foreclosed properties of cabinets, appliances, plumbing and electrical fixtures, copper plumbing pipes and electrical wiring, water heaters, and even furnace and air conditioning systems.  Others deliberately vandalize the home when they vacate, breaking windows, busting holes in the walls, even blocking drains and then turning on all the water faucets.  Flooding a property can quickly cause tens of thousands of dollars in damage and serious mold contamination problems.

Mold Problems

Any property can develop mold problems whether occupied or not; however, foreclosed properties, particularly when they sit vacant for a while, are much more prone to mold contamination.  This is due to less maintenance, as well as the fact that the primary moisture source in buildings is not the occupants, but rather foundation walls, basement floors and crawl spaces.  

The problem then becomes exponentially worse when vacant homes are not climatically controlled to maintain correct temperatures and humidity levels to prevent mold growth.  Mold can begin germinating and spreading on indoor surfaces in as little as 48 hours.

Indoor moisture problems can also compound with the introduction of moisture vapor from sewer systems that enters vacant buildings through plumbing fixture drains when the water inside the drain traps dries out from lack of use, sometimes in as little as three weeks.  Additional mold spores enter buildings with the moisture vapor from sewer systems, making matters even worse.

Mold can spread throughout a building without the knowledge of the seller, particularly when the selling party is a lending institution that is not occupying the building.  

Mold contamination is seldom apparent and difficult to see for an untrained person.  When someone does notice visible mold, they often think that what they see is the extent of the problem, when it is often merely an indicator of a much larger and more costly problem that requires proper inspection.


When entering a vacant or foreclosed home, if malodors of any kind are detected, they indicate an indoor environmental problem that should be professionally investigated.  Sometimes the odors will only be present in a certain room or in a basement.  The best time to be aware of possible odors are immediately upon entering a building or a room.  Also, if chemical deodorizers are in use, they are almost always used to cover-up indoor environmental problems.

Odors are not the result of properties being vacant, they are caused from metabolic gasses emitted from active mold or bacteria growth in a building, and/or from unhealthy gasses from the sewer system that have accumulated to unsafe levels.

Biological odors are not always obvious to everybody.  One person might smell or react to airborne pollutants while another person in the same room may not notice the odor or experience a reaction.  Some people have a better sense of smell or are more sensitive to pollutants.

Biological odors can also become fainter and stronger intermittently depending upon indoor air pressures or the amount of moisture currently in the air.  Therefore, the slightest hint of an odor would suggest the importance of a proper indoor environmental inspection. There may also be visible mold in a building that is not currently generating an odor because it is temporarily dormant, waiting for humidity levels to rise again.  In any case, if one smells a dank or musty odor, mold is always actively growing somewhere nearby.

Malodors in foreclosed properties can also be caused from urine and fecal matter residue left behind from pets.  These contaminants may have absorbed into carpet, walls, or concrete flooring.  Sometimes these odors are distinctive and sometimes they can be subtle, but in any case, they need further investigation to determine the extent of the problem.

Real Estate Agents

Real estate agents, it is always in the best interest of your client, and your professional reputation, to have an environmental inspection performed by a professional with the proper equipment and experience who can offer practical advice.  Doing this timely or concurrent with a home inspection will help prevent excessive costs and upset clients, as well as reduce the potential for law suits. Whenever a real estate agent demeans conditions, or simply suggests spraying bleach on mold or opening windows to eliminate odors, the door to liability is wide open.

Financial Institutions

When a lending institution has knowledge that a property is going to be foreclosed upon, a mold and moisture inspection should be immediately scheduled to verify current conditions, followed by a plan to prevent indoor environmental problems from occurring during the vacancy period.

Simply placing a dehumidifier in a property with some chemical deodorizers is not a solution.  Moreover, to prevent liability, if a property already has known odors or visible mold, real estate agents and potential buyers should not be allowed in the property until the extent of the problem has been identified and corrected.

A professional inspection will reveal the extent of possible concerns and provide practical solutions in a written report to resolve possible problems and get a property ready for market.  If mold was discovered, it is best to follow up the remediation with a mold test and a clearance inspection that will document in a written report that proper remediation had been performed.  This document helps to increase salability and reduce seller liability.

Contact Dan Schilling when professional inspections are needed on foreclosure properties.

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