How to avoid buying a home with hidden hazards
By Erik J. Martin
Prospective buyer beware: that home for sale you’re eyeing could be a ticking time bomb – perhaps a termite headquarters, lead-based paint mecca, former meth lab site or environmentally polluted property. And you won’t know for sure unless you do your homework, according to the experts.
Alarmingly, a new ATTOM Data Solutions report reveals that 17.3 million single-family homes and condos worth a collective $4.9 trillion in estimated market value are located in zip codes with high or very high risk for at least one of four environmental hazards: poor air quality, industrial pollution, Superfunds (categorized by the EPA as being contaminated with hazardous waste) or brownfields (a property that may contain a hazardous substance, contaminant or pollutant). These homes represent 25 percent of the 68.1 million total residences evaluated in the report. The study indicated that, in general, properties within higher environmental hazard risk areas suffered from lower home price appreciation, decreased home values and increased rates of underwater mortgages.
“These findings suggest that, in addition to being better for your family’s health and safety, buying a home in an area with low risk for environmental hazards can be a smart investment decision,” said Daren Blomquist, senior vice president for ATTOM Data Solutions in Irvine, Calif. “The major takeaway here is that it’s important to go into a home purchase with eyes wide open about all the benefits and risks that come with that purchase, including environmental hazard risk, which can potentially negatively impact not only your health but also your wealth.”
Blomquist warns that, while some environmental hazards are required to be disclosed before you purchase a home, they often won’t be disclosed until the closing process, which could be at the last minute when you’re buried in a mountain of paperwork you’re signing at the closing table. That means it’s in your best interest to perform what Blomquist calls a “pre-diligence” of homes you are considering to buy early on in the buying process, well before you reach the closing table.
The first step is to hire an independent property inspector whom you select carefully instead of blindly trusting in a home inspection done by your mortgage company.
“Buyers should always make sure to have a careful home inspection performed by someone they trust to reveal the good, bad and ugly about a home,” Blomquist said.
Cheryl Reed, director of external communication for Angie’s List in Indianapolis, recommends testing the home for radon, lead, mold, asbestos and meth production.
“It’s really important to test for meth these days, because you don’t know if a previous owner produced math on the premises but was never caught,” Reed said, who added that meth test kits cost around $50. “If you find evidence of any contaminant, don’t hire the inspector to correct it. Enlist a qualified, reputable mediator.”
John Risvold, attorney with The Collins Law Firm P.C. In Naperville, Ill., recommends learning all you can about your property’s water source.
“Ensure that the water is safe to drink and free of chemicals,” Risvold said. “Be aware that toxins from Superfund and brownfield areas can also seep into soil and groundwater and infiltrate your home through a process called vapor intrusion, resulting in serious health hazards.”
According to Scott Reidenbach, attorney/founding principal of Wayne, Pa.-based Reidenbach & Associates LLC, prospective buyers can negotiate for additional time to perform due diligence either before going under contract or during.
“During this time, look for nearby manufacturing or chemical operations that could be polluting the air or ground water or that would create quite a mess if they were to catch fire or have an accident,” Reidenbach said. “Water runoff and storm water issues are huge concerns, too, as is noise pollution. Walk the community yourself and talk to neighbors who have lived in the area for years.”
Additionally, you should visit the local municipal records building or village hall to request public records for the home and nearby area. You can also find valuable information online about the home you are considering buying. Visit the EPA’s MyEnvironment site (www3.epa.gov/enviro/myenviro), the EPA’s Brownfields site (epa.gov/brownfields) and ATTOM’s HomeDisclosure.com, which provides environmental hazard information for many for-sale properties.