I recently purchased a home that was built in 1965. I bought the home from a bank that took it back in a foreclosure.
I know that the bank does an inspection on bank-owned foreclosures, and I had a home inspection done also. The home had foundation work done at some point. I was led to believe that the home had updated electrical wiring and updated plumbing. I had a contractor come in to do some renovations that I thought were going to be cosmetic. As it turned out, almost every area we tackled opened up a can of worms: exposed electrical connections in the attic and broken sewer pipes.
Shouldn’t this have been discovered by the bank’s inspectors or my home inspector? In these cases, who is liable for the repairs? I feel like I have been a victim of fraud. Is it legal to sell a home that has busted plumbing as serious as this one? The electrical cost me about $1,000 and the plumbing repair will be another $1,000. Should I be talking to a real estate lawyer about this? I am out of money, as there were several other problem with the home.
When you buy a bank owned property, you take risks. The bank has not lived in the home and the bank doesn’t have knowledge about the home’s history. You, as the buyer, must take extra care when buying a foreclosed home. It seems that you tried to take care but still have found problems with the home.
The real question is whether the problems you uncovered could have been discovered by a reasonable home inspection. We’re not sure whether a normal home inspection could have uncovered problems with the sewer system. We know of two basic ways to discover plumbing sewer problems with a home. The first way is to have a plumbing company scope the drainage system with a camera. The second is to start using the system until you uncover the problem.
Keep in mind that a home that has been vacant for some time develops problems on its own. It’s as if a vacant home knows that it should start to fall apart. By that, we mean that the sewer system may not have been used for some time and that lack of use could have contributed to the problems you now face. Furthermore, a new family moving into a home frequently ends up using the systems of the home to a greater degree than previous owners did.
It’s not unusual to have an elderly couple sell their home to a new young family and for that new family to uncover plumbing problems. Consider that the new family may use the showers, bathtubs, toilets, laundry room, kitchen sink and dishwasher to a much greater degree than their predecessors. In this situation, a collapsed drain with some flow might not be detected by the elderly couple, but the new homeowners will certainly find it, and fast.
Turning to the electrical issue, it seems that you uncovered that problem once you dug into the electrical system in the attic. If these connections were visible without opening up walls or floors or turning over insulation, the inspector should have discovered them. Now, if you found the problem by opening up areas of the home, few, if any, inspectors could have found that out.
Sometimes homeowners or their contractors do a sloppy job of renovating a home. In many cases, poor workmanship may violate local codes and ordinances. Nevertheless, that violation may be too difficult to find in an ordinary inspection. We don’t believe that inspectors should be responsible for uncovering problems that could only have been discovered by opening up walls.
You’ll have to judge for yourself if your inspector could have or should have seen these electrical problems.
You are out about $2,000 and have the right to be upset. When you buy a home, you attempt to limit your potential exposure to these problems by hiring a home inspector. If the home inspector did his or her job and found other items that were problems with the home, he or she probably satisfied their duty as a home inspector.
As for the bank, it probably knew little if anything about the home. If the home had electrical work done, the real estate agent for the bank may have told you that electrical work had been done on the home, but the agent would not have known if it was done properly.
You certainly can talk to a real estate attorney about your complaint, but we recommend that you learn more about the issues you faced and how easy or hard it would have been for someone to find out about them. Just because you purchased a home with problems doesn’t mean that you will find a party responsible to sue and get money from. It’s quite possible that the bank has no responsibility to you and that the home inspector performed as required. If this is the case, you might be out of luck.
If you decide to talk to an attorney, find out if you will have to pay for the initial consultation. If you decide to proceed with the attorney, you’ll have to decide whom you would go after and your likelihood of success. Your likelihood of success will depend on the strength of your case and willingness to spend money — a lot of money — to go after someone.
What you may quickly discover is that suing to recover $2,000, while a lot of money to you, isn’t worth the cost or time it will take.
Ilyce R. Glink’s latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site, www.thinkglink.com.