I know - $9900 dollars for a house? I could sell my garden shed for that much right now.
Do you ever watch “Flip This House,” IntelSoldier? If it’s an old, rundown house it is almost guaranteed to have problems, but if you’re willing and able to fix them (and it might be major fixes - taking walls back to the studs, re-doing all the wiring and plumbing, etc.), you can certainly turn almost anything into a livable house.
Do you guys not have lawyers involved in your real estate purchases? I would never do a real estate deal without my lawyer. It’s his professional ass on the line for all the title searches and title change registrations and all that crap.
You aren’t planning on trying to get a VA loan on that house, are you? Because they’re pretty picky about things being in perfect repair–and that isn’t. I love a fixer-upper, and that house could possibly be a good deal, but I would expect just about every problem you listed plus some to come up with any inspection you have done. In fact, you could probably walk through the house and find all of those problems yourself. The one thing you shouldn’t be worried about are liens–your title insurance company should clear all of that up before you close.
Are you planning on fixing the house up and living in it? Flipping it? Fixing things yourself? Have you ever done any of this before? Do you like camping? In your living room? (Only half kidding here.)
Really, I’m not trying to discourage you. My husband and I have made a lot of money with houses like this, and it can be a lot of fun. But a $10K house is going to have some big problems, and they’re going to cost more than that to fix.
When did the VA start offering free inspections? I had to find my own inspector and make sure he was on the VA approved list (and almost all of the professionally-associated inspection companies were), as well as pay him out of pocket. Of course that was refunded to me at closing by the seller (not the VA).
Also, the VA isn’t just for first-time purchasers. You can only have one VA loan at a time, but you can use it every time you buy a house if you want. I chose not to this time because the VA funding fee plus the half-point extra interest was significantly higher than the terms I got on my 80/20 loans.
Finally, when I bought that first house with the VA, it wasn’t really all that tough. The only thing the seller had to do was rip out the improvised wiring in the garage (outdoor extension cords were attached to the studs and run as if it were Romex). The house otherwise wasn’t perfect, but there was nothing glaringly wrong with it. A regular inspector would point out problems and the buyer could require that they be fixed just as well.
I noticed that in all of the pics, there is paneling in every single room. This makes me wonder if there was some kind of internal damage (paneling can be used to quickly and cheaply cover up damage). The house I live in now was paneled all inside, and it turns out it was done only because someone didn’t like to paint. Paneling isn’t necessarily a bad thing, but it’s something to be careful of.
It also looks like the house is on a hill (yeah I know, in that area, what isn’t…). Look for signs of water damage or a leaky basement. Pay particular attention to the foundation, especially on the side facing the hill.
In glorious Allegheny county the assessment system is a complete mess.
Current property values are set on a “base year” system of (IIRC) 2002 values. They tried reassessing in 2005 to get 2006 values, but they were so completely screwed up (our property’s assessed value would have gone up 56% with no changes to the property!) that they scrapped them and went to the current base year system. Even the 2002 assessment was a mess - something like over 30% of the county appealed. It took them all year and a chunk of change to go through the appeals process. Those who successfully appealed would have had their appealed values scrapped by the 2005 munged assessment.
There’s supposed to be another assessment coming up soon. Whoopee.
So the value you see listed on the county’s assessment page goes back to 2002, and may be rather inaccurate anyway. (although I agree that $9,000 is low) I think that house looks like a mess of trouble - this from someone living in a major fixer-upper herself. Based on the location, even if you did any necessary work, it’s still on a goofy lot. I like the one on Moffat better.
I’m just going off what the OP said. When I had my VA loan I picked my own inspector. Got a ferocious guy and had him annotate very thoroughly, only to find out that the VA wanted EVERYTHING fixed with 5 days to close. It caused all parties no small amount of consternation. I vowed that next time I got a VA loan I’d have the inspector make 2 reports, 1 for the VA detailing major defects, and one for me detailing the minor/cosmetic ones. But I reckon it sounds as if the VA has gotten wise to that approach.
Title issues are usually handled by a title company or an attorney, depending on the customs of your state (in Florida, either an attorney or a title company handles these issues; I think only attorneys do the work in New York). This isn’t really a concern for you, though, before you sign a contract. Any tax liens and/or other assessments against the property would be charged to the seller, who is usually (i.e. its included in any standard, reputable real estate contract) obligated to provide you clear title to the property (i.e. you buy it free of anybody else’s rights, save the usual authority of the local government to maintain utilities, etc.). If there are debts on the property (such as a mortgage, unpaid taxes, or some unpaid bill owed to a contractor) those costs will come out of the seller’s profit. I do title work all the time, but that process doesn’t begin until there is a contract for sale.
More importantly, from your perspective, would be to make sure the contract is contingent on a home inspection (as has already been mentioned). Or, you could make the contract contingent on the fact that it is appraised at a certain value (i.e. you can cancel the contract if it isn’t worth X dollars). You would probably be expected to pay for the appraisal, but a few hundred dollars would be worth protecting your investment. I wouldn’t rely on the county’s “assessed value” as an accurate guide to the value of the property, since they are not in the business of providing a price guide.