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Lexington KY Foreclosed Homes - Buying A Foreclosed Home? The Home's Recent History May Kill Your Family!

Lexington KY Foreclosed Homes - Danger bad stepsBuying A Foreclosed Home? The Home's Recent History May Kill Your Family!

What do you really know about this house?

Sure, it looks like a bargain from the outside. The media makes these foreclosed homes sound like the ultimate deal.

There is no seller's disclosure to tell you about any problems or repairs that have been made from the previous owners.

What you don't know may kill you and ruin you financially!

Many of these foreclosed homes may have had meth labs in them. Just walking in one can be dangerous! Realtors really have no idea they might be touring a future health issue.

Read here about one family's discovery and illnesses from a home they purchased. They did not discover the meth history for 5 years after they moved in. They were all sick and now broke from their foreclosed home! More about meth homes.

Once foreclosed, they are resold without any documentation of the history. Just walking in one of these homes is dangerous.

What if one was bought to flip and only minimal cosmetic work was done and it was back on the market to unsuspecting buyers?

Many clients ask me about foreclosed homes. I don't have any listed and I don't usually show them to clients. I might show one if it is listed or the client requests it specifically.

In Kentucky it is now a Class D felony to rent, lease or sell a home if the owner has not provided a written notice that the property has been contaminated by methamphetamine and has not been properly cleaned up by a certified contractor.

Each violation could result in a fine of up to $25,000 and/or imprisonment from one to five years.   

Mold can be another issue in foreclosed homes. I can remember standing outside one home while the client looked inside. All of the basement walls had black mold! I had toured this one before it went into foreclosure and ran across this. I told the client before we went and they still wanted to tour it. They didn't buy it. I knew they wouldn't before going over there.

There are even more hidden issues in these foreclosed homes. Liens, water damage and more! I want the best for my clients and no legal issues for later down the road for both of us.

Be aware before you buy. What smells like a bargain may be no bargain in the long run.

 

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Lizette Realty Lizette Fitzpatrick

Lizette FitzpatrickPrincipal Broker at Lizette Realty.

#1 featured Kentucky Realtor on Activerain.com and Localism.com.

Publisher/Author for the only Central Kentucky email newsletter on local real estate listings and sold properties, Kentucky relocation, local events, homeowner information and fun!

For more information on Kentucky Horse Farms, Lizette RealtyRichmond or Lexington KY real estate and homes for sale. 

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See for yourself what Lizette's extraordinary clients have to say about their Kentucky Real Estate experience. Copyright © 2009 By Lizette Fitzpatrick, All Rights Reserved *Lexington KY Foreclosed Homes - Buying A Foreclosed Home? The Home's Recent History May Kill Your Family!*

 

Comment balloon 29 commentsLizette Fitzpatrick • July 15 2009 11:00PM

Comments

Great post, Lizette!  I just wrote one yesterday on mold contamination and it fits nicely with your topic.  In my post, I talk about a foreclosed home currently for sale in my area and how it has black, toxic-looking mold throughout the entire basement and around the HVAC system.  So I'm sure the air vents are also contaminated.  My fear is that the bank is getting in a contractor who is not professionally trained in mold remediation to gut the basement and the problem will still be there, just hidden.  So whomever buys that home may end up becoming ill. 

Just another reason to avoid foreclosures unless you know the entire history of the property!

-Tim

Posted by Tim Cahill, MBA, EcoBroker (RE/MAX Results) almost 9 years ago

Great post! Thanks for sharing. I hope you have a wonderful rest of the week!

Posted by Team Honeycutt (Allen Tate) almost 9 years ago

nice post Lizette. Yes the mold is a scarey thing, if it is just covered up, someway.  Feel sorry for the buyers who have to live with something like that.  thanks for sharing!

Posted by Ginger Moore (Wilkinson & Associates Realty) almost 9 years ago

Lizette - Great information.  I try to tell my buyer clients all the time that bank owned homes are not always such a good deal.  There are just too many unknowns like you said, and the sellers have no liability.

Posted by Troy Erickson, Your Chandler, Ahwatukee, and East Valley Realtor (Diverse Solutions Realty www.ChandlerRealEstate.weebly.com) almost 9 years ago

Tim - It's sure a lot to think about. Especially since once we buy a home we have to disclose any cleanup we have done. Then try to sell it.

Allen - Thanks for stopping by my post! Hope your week is fantastic!

Ginger - Wouldn't that be a disaster? I can't imagine.

Troy - I think the idea of a house that is undervalued is the lure.

Posted by Lizette Fitzpatrick, Lizette Realty,Lexington KY MLS - Kentucky Homes - (Lizette Realty - Lexington KY - Richmond KY) almost 9 years ago

Hi Lizette!  Interesting that you bring this up--I had a potential seller that said that a renter that he had was using his property as a meth house--in a really nice neighborhood.  He didn't know whether or not to disclose this fact on the property disclosure.  All has been cleaned, re-sheetrocked and painted, etc. but, this mind brings to mind that very question--is this a material fact?

Great post!

Debe in Charlotte

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) almost 9 years ago

Meth. Lab disclosure is mandatory for the owner and Realtor but for the banks I am unsure. It brings a good question to my mind. I always think septic, well, plumbing, inspection appraisal. I am going to pursue this issue.

Posted by Sabrina Kelley, Woodland Park Colorado Mountain Homes and Land (ERA Herman Group Real Estate) almost 9 years ago

Lizette - terrific post of information for unsuspecting buyers (and agents) to keep in mind.

I have heard a few horrow stories myself. The banks, not having lived the, are essentially exempt from most disclosures of any value. While we have a meth lab disclosure I don;t bleieve this is required in teh case of an REO. Mold can, of course, be a huge issue - I have had few folks bother to have a mold inspection, but fortunately have a great company in San Diego County (also covers LA and Orange counties) - VM3 Environmental (hope you don't mind me sharing the link for the local folks).

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) almost 9 years ago

Lizette - the Texas Seller's Disclosure form is required to be filled out by all sellers (with a few exceptions, like foreclosures) and a recent change to the promulgated form included whether or not a meth lab was ever on the property. Great reminders for buyers!

Posted by Kim Dean, d + b real estate, McKinney, TX REALTOR Broker/Own (www.RealFamilyRealEstate.com) almost 9 years ago

They certainly require open eyes before jumping.  There are some great deals, but there are some dogs, too. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) almost 9 years ago

Lizette... what a great post. There can be so many unknown facts about a foreclosed home.

Posted by Roland Woodworth, Q Realty - Power In Real Estate (Q Realty) almost 9 years ago

Lizette,

Great post.  Sometimes we see these homes sell for 50 cents on the dollar and often wonder what they are not telling.

Thanks for sharing.  All buyers should beware.

Posted by Linda Lipscomb, 731-695-1118, Lexington TN Homes (Linda Lipscomb RE/MAX Lexington Henderson County TN) almost 9 years ago

Good post Lizette,

Many stumbling blocks in a house with no disclosed history. Here, we have to give full disclosure on grow ops etc. (if known).

Posted by Terry Chenier (Homelife Glenayre Realty) almost 9 years ago

While it wouldn't help a couple of the things you've pointed out, I think every redecorater(flipper) should sell each home(and it's  unknown) with a Home Warranty !!!

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) almost 9 years ago

In our area we can do an archive search on properties. Sometimes you can find the last disclosure and get some history that way.  You can also ask the local police department if it has been a meth house...I think.

Posted by Bob Haywood, BobHaywood.com (McGraw Realtors) almost 9 years ago

Great information. A lot of people look at the upfront money they could potential save by buying a foreclosure, but they don't realize that there could be significant costs down the road. We almost bought a foreclosure for our first home and even though it was as is, we got an inspection. It would have killed us financially if we had bought the "great deal".

Posted by Darrell Walters (W. Darrell Walters) almost 9 years ago

Lizette, I have always told my buyers that a foreclosure is not always a "deal"  afterall the bank knows what the property is worth and they are not going to give it away, if they want to unload it they only have to drop the price just below market, not WAY below!  and if it is way below there is a reason for it! 

Much the same as in my business, if some one quotes a rate that is WAY lower than market, there is a reason for it!  much the same as our Mom's would tell us: "If it sounds to good to be true, it probably is!"

Posted by Robert Rauf (HomeBridge Financial Services (NJ)) almost 9 years ago

I wish every bargain hunter coming from the fee charged websites and infomercials could read this. I will do my best to share this good info in my market. A $40k savings is no good after $60k in repairs, not to mention the health issues you raised. Thank you for a timely post.

PS. How's this Ambassadorship goin' for ya? I have had an interesting week with my peers. All good!

Posted by David M. Childress, I would love to be your Realtor® in Akron Ohio! (Howard Hanna Real Estate Services) almost 9 years ago

Lizette, you make some great points.  Our Property Condition Disclosure has a question about the property ever being used as a meth lab; however, REOs don't have to fill out this form.  I have come across a few bank-owned homes that require the agent and prospective buyer sign a disclosure and waiver before going in to the house due to mold.

Posted by Pam Simpson, GRI, Broker-Assoc. (Bob Leigh & Assoc., LLC) almost 9 years ago

Nice post... all the reason why it is SO important to use a very experienced Real Estate Agent when purchasing a Bank Owned Home.

Posted by Paul Francis, Las Vegas Real Estate Agent - Summerlin Homes (Francis Group Real Estate) almost 9 years ago

You work with investors you see it all. Just because it looks like a good deal on paper doesn't mean it is.

Like you, I sometimes try to tell the buyers that a home is not worth their time to see ... but that's a touch sell until they know you and trust you. It works much better over time.

Posted by Vickie Nagy almost 9 years ago

Lizette, I have read about Meth clinics in homes--All kinds of home from upscale to run down places and it's frightening.  And of course have first hand experienced black mold effects. They are wonderful warnings but before I'd purchase ANY home, I would find a top home inspector first.  (And if that passed, possibly an environmentalist!).  I know here there are still some lovely foreclosed homes but think this would help protect the buyer (?)

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) almost 9 years ago

Lizette, I heard something similar from Patricia Beck in Colorado where they even have web sites set up for the former meth houses, kind of like the sex offender rolls. No one wants to get ill from moving in a house. A tragic story for some for sure.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 9 years ago

Nice post and good advice, we purchased a foreclosed home and wish we would have done more due dilligence than we did beforehand. There are no property disclosures and you really don't know what you're getting unless you really do your homework.

Posted by Monica Bourgeau, Business Coaching (New Phase Business Coaching) almost 9 years ago

These are some of the reasons why it's so important to get a good inspector to inspect your purchase.  Down here we're having problems with undisclosed chinese drywall; a good inspector will find it!

Posted by Marie Story, Broker Associate, Pinecrest (Miami) Specialist (Coldwell Banker - Pinecrest (Miami)) almost 9 years ago

WOW...hadn't even thought about meth labs, but I guess living here in the mountains I should keep my eyes open for it.  I have seen some REALLY CRAZY HOMES with MUSHROOMS GROWING on the floor, walls and ceiling from having so much water damage though.  I'm talking large growths of mushrooms.  Why would the bank even put something like that on the market?

Posted by Kerry Jenkins (Prime Properties) almost 9 years ago

Boy, you hit the nail on the head with this post!  These issues are things that many buyers don't consider when in hot pursuit of a 'great deal.'

Posted by Lola Audu, Audu Real Estate~Grand Rapids, MI ~Welcome Home! (Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate) almost 9 years ago

Another reason why I strongly urge all of my buyer clients to have a home inspection. I even have them sign a form that again urges them to have a home inspection.

Posted by Vanessa Calhoun, Your Greater Atlanta Marketing Guru!! (PalmerHouse Properties Realty) almost 9 years ago
 

yes they look so nice but Foreclosures are such tough on to stomach.

Posted by Paul Gapski, 619-504-8999,#1 Resource SD Relo (Berkshire Hathaway / Prudential Ca Realty) over 6 years ago

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