Buying a Hoarder House? Top things to look for that can make or break you

Buying a home is one of the biggest decisions most people will make in their lifetime, right behind getting married. However, in today's fast-paced housing market, it has become a challenge.  Buyers are are lined up competing for houses that have 5 offers on them before the end of the first day. 

Buying a Hoarder House

Top Keys to Buying a Hoarder House

With all this competition it is worth considering other options.  Buying a hoarder house used to be something only investors or contractors would attempt, but in order to avoid the relentless offer rejection on move-in-ready homes, buyers have started looking at houses that need a little more love.  In some cases, they are even looking at hoarder houses to fix clean and move into.

This decision has somewhat become popularized as flips did with tv shows like those on HGTV.  Hoarders (the show) has brought attention to this not-so-glamorous market.  Showing conventional homeowners and buyers that it's possible to overcome the challenge whether you are living in a house that has gotten out of hand or looking to buy one.

So, what is a Hoarder House?

If you aren't living in a hoarder home it's likely you know how to tell what a hoarder house is, but often this isn't the case for those actually stuck in this lifestyle.  Hoarding is a disorder and often starts small.  Creeping up on the owner slowly over time until the house becomes what most would say is unlivable.

Sometimes clutter can be mistaken for hoarding but in general, if your way of life or health isn't being damaged then it's probably just clutter.  If the house gets to a point where the clutter is now affecting your ability to go from room to room and there isn't a place to put the items back then it's hoarding or at least on the verge.

When buying a home like this, you must be prepared there are a lot of things to consider that aren't always obvious.  That being said, when done properly there are a lot of good reasons to buy one of these homes.

Why buy a hoarder house?

People buy homes for various reasons. Investors buy the homes to renovate, reorganize and resell them to make profits. On the other hand, some people buy these homes and convert them into permanent residences. Not all of these homes are as bad as the shows portray them. Of course, some of them might be even worse than you have seen on tv.  There are good reasons to buy a home like this, but it's crucial to know the pros and cons.

What Factors Should You Consider When Buying a Hoarder House?

If you’re thinking of buying a house, it’s essential to be careful and pay attention to crucial factors that will help you in your decision.

The houses can be better than they appear on TV 

As mentioned earlier some episodes on television show homes that are so bad you can't enter any rooms.  Floors are falling in the smell is unbearable and who knows what kind of structural damage there is.  However, in reality, not all of these houses are that bad. Although the houses are disorderly, and sometimes very difficult to walk through.  They are often still structurally sound,  don't have other major underlying issues, and need light updating (once all the clutter is removed of course).

Finding one of these homes can be a great deal.  They often look extremely bad but because there isn't really damage it's easier to take care of.  The poor visual appeal will affect the number of buyers interested in the house which in turn lowers the price. More on that later.

The Houses can be much worse than they appear on TV

Sometimes it's the opposite of earlier.  Hoarder homes can be very bad.  On top of the major issues shown on your favorite shows, there can be serious underlying issues that are covered up by the number of items in the home.  Some of the issues can be so serious that they affect your health just by being inside the building.  Some of the most important things that should affect your decision, or at least your offer price are:

  • Clutter or Garbage - Is it clutter like scattered toys or is it truly garbage
    • Clutter is bad but it's a simple fix and much of it can even be sold or donated to keep your costs down
    • Garbage has to be thrown out and if it has been there a while can lead to other issues such as pests and structural damage.  If there are liquids leaking out it can cause rot and mold.  This will cost more money to clean up and is dangerous
  • Pet/Animal Hoarding - If animals are or were involved it can get much more expensive.  Not only can they do damage often unseen it can bring other issues like diseases and other pests.
  • Odors - Look or more importantly keep your sniffer in check.  Odors can be bad for multiple reasons.
    • Pet odors can actually cause health disorders and the smell is very hard to get rid of often requiring all new floors and sometimes even walls.
    • Mildew smells can be another really large issue.  Often this accompanies mold problems.  Again this can be a major health concern and a major cost to clean up.  Often requiring floor, wall, or even structural wood to be removed or encapsulated.
    • Rotten Odors like food and garbage waste although not as bad as the above need to be looked into a little deeper.  Left out it can rot wood or other surfaces and as with many of the other things it brings in other pests.
  • Structural Issues - These are usually caused by too much weight, overloading attics and floors for extended periods of time.  Rot also occurs.  Sometimes clues like odors can show bring light to these issues, but no smell doesn't mean there isn't a problem.  Make sure to look around, look under the house, in the attic.  If there are wet areas or wet looking (wet in the past maybe) dig deeper.
  • Mold - Make sure you are looking for this issue.  It was mentioned earlier that mildew smells can be a sign but if you realize it's mold you shouldn't be breathing it in.  Keep an eye out for it.  Look for wet areas.  Black green white or just any odd coloring on walls, floors ceilings, and in the attic.  This is a major issue and isn't always easy to get fixed.

Those are some of the major things that should be looked at.  Not everything is a deal killer but these things should affect what you are willing to pay.  Investors buy these houses at pretty large discounts and just because you are going to live in it doesn't mean that you should offer the moon. There are a couple of other things to consider. 

Mortgages for hoarder houses can be much more difficult

If you’re planning to buy these homes, remember your bank may not offer you loans. Most of these houses need extreme remodeling to bring them back to life, and it’s not easy to estimate the future value even after fixing everything. Thus, convincing your bank to provide you with the finances to buy a hoarder house can be an uphill task.

Have ready cash with you if you are really interested in buying this home since your bank may not help. However, if you have an awe-inspiring credit score, your bank may be good enough to give you a loan package to purchase the house and the rehab.  Reach out to your bank or lender to guide you on how to get funding for such as a house. 

There are other methods to funding this type of home which is a little beyond this article but if you are willing to take on the challenge funding is possible.  This leads to the last point when considering a hoarder home.

Know your Costs to Fix Before Buying a Hoarder House

Since you are still considering buying a home like this it's important to consider one last thing.  Probably the most important aspect of buying a hoarder home is knowing the costs involved in cleaning and or fixing them.  The more trash and damage the more it will cost to fix the house up.  You must have a pretty good idea of how much things will cost so you can avoid paying too much.  The last thing you will want to do is buy a home like this and not have enough money in the rehab to finish cleaning it and fixing it.  Having a good idea of what it will take allows you to back that much money (or a little extra to be safe) out of your offer.

Conclusion

Every homebuyer looks for quality and value for money. However, hoarder properties depend on the specific house that you decide to buy. Some houses may be almost as good as new under a little clutter. Others may be in extremely bad condition and end up costing more than time and money than if you just upped your bid in those multi-offer bidding wars. That’s why it’s essential to do some research. Buying these homes can be very rewarding, but they can also cause a lot of headaches; you must be prepared for any outcome.

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