Purchasing a home in a tax sale auction can help you save a lot of money, but you'll need to be prepared for home renovation costs. Many buyers in tax sale auctions only pay the amount of the taxes owed to the county, unless there is a bidding war with others at the auction. In addition to the price difference, the other major difference is that buyers are unable to walk through the house or have a professional inspection done on the house.
You simply have to bite the bullet and take your chances. After your winning bid, you will finally be able to walk through the home you purchased. Here are a few things to look for when you do.
Mold Growth
Wet or damp conditions can cause dangerous mold to grow inside the home. Some signs of mold are quite obvious but, sometimes, mold growth can be hidden inside walls and cavities yet still affect the occupant's health. Since you don't know if you will be stepping into a haven for mold, wear a medical grade mask over your nose and mouth. Purchase a mold test kit from a home improvement store so you can immediately test for mold.
Mold remediation can cost as much as $6,000.
Asbestos
Asbestos is another hazard that is well-known which you may find in the home you purchased. Because of the possibility of asbestos in building materials of the home, do not move or remove any materials, particularly insulation, ceiling tiles, flooring, or adhesives. Asbestos does not pose a problem unless it is handled, which can cause the fibers to be released into the air. Asbestos test kits can also be purchased at home improvement stores.
Asbestos removal can cost as much as $30,000.
Lead Paint
Lead paint was banned in the late 1970s. If the house was built before then, it's safe to assume that at least some of the paint contains lead, although the lead-containing paint may be hidden under several layers of paint that is lead-free. Lead paint should be removed whenever possible. Purchase a lead paint test kit as well.
Lead paint removal can cost as much as $45,000.
Fortunately, the winning bid in a tax sale auction is usually far lower than the typical price on the housing market, which can leave a lot of room in one's renovation budget, but you may still need to obtain a renovation home loan if mold, asbestos, and/or lead are found. If these dangerous toxins are found in the home, the home will likely need to be gutted and completely renovated.
