Castles in the Sand

This is a cautionary tale of buying foreclosed homes. The documentation you don’t get when you purchase a home is just as important as the documentation you do. One of the things missing in a foreclosure purchase is disclosure on the history of the property.

… A young buyer found the home of his dreams. He won the bid and eagerly awaited his closing date. In his excitement he would come by the neighborhood, walking his dog, meeting some of the neighbors, and peeking in the windows of his soon to be new home.

His enthusiasm was growing each day, until he peeked in the window of his soon to be castle and discovered the ceiling of the kitchen had fallen and was strewn across the counters and floor. Water was pouring down into the kitchen and upon further inspection into the living room as well.

The beautiful new carpet, the fresh paint, new kitchen and bath cabinets. All ruined…

With this type of news, the neighborhood gathered to commiserate with the saddened buyer. From this gathering it was revealed that this house had had similar issues in the past. In fact when the bank foreclosed, they had to do the same repair, and apparently the source of the water leak had not been corrected by the banks cleanup crew.

Now, the future of this young and disappointed buyer is still not known, but the banks cleanup crew is back again, doing the same job, with less mold to remediate, due to the speed the water damage was reported and addressed….

And the Bank, did they disclose the repairs they had to do prior to selling the property – No

Will the bank disclose the damage and repairs that are being done today… No

Because when you purchase a bank owned property you are purchasing “As Is”, “Where Is” and you not only do not receive disclosures, but sign documentation that says you can’t sue the bank for any items you discover in the future either.

Comments

  1. Hi Chris,

    The home wasn’t an investor owned. The bank foreclosed, and before they got in to clean up the water leak from years before mysteriously started to flow…. and when the bank did go in they had to fully remodel and do the mold clean up. Then, it happened again days before closing. They did clean up again… and new owners are in the house today. With no idea of the mess that was there before.

  2. Carpe Diem. This bank owned, investor owned, secondary flipping scheme owned property is the second nightmare to the flip.

  3. This article hits close to home (literally). There’s a house in my neighborhood that was abandoned after a fire occurred in it. It didn’t gut the house, but there were some windows that were broken & smoke damage. The windows were not repaired for months so the house had to have water damage from monsoon storms, etc. Eventually repairs were made & the house was on the market for a long time.

    Recently someone bought the house, and I wondered if they would have been told anything at all about its history. I don’t know the buyer, but I wonder what kind of real condition the house is in.

    It’s definitely a cautionary tale to pursue a bank-owned property!