Hey, y’all! I could really use some advice and thoughts about this real estate situation, or maybe just some moral support. Anyway, here it is… and I warn you, it’s long.
I decided a little while ago that I really did not want to rent anymore, as it was driving me nuts and I’d been taking care of virtually all maintenance anyway. I have never found a house rental situation in this area where the landlord took care of things, I’m sick of dealing with it, and I don’t want to live in an apartment again if there’s ANY way to avoid it.
Well, I found a cute house in an adorable neighborhood. Built in 1954, it had been a 2 bedroom, 1 bath, and an addition had been built (the owner was vague about when, but said “last 20 years”) that had another bedroom and a bath. Cute! However, when I walked on the floor of the addition, it felt like a great big sponge. :rolleyes: I’ve helped my grandfather build 2 houses from scratch, so I know just enough to get in trouble, and I KNEW that was not a good sign. Well, being me, I began to do some digging. I went down to Metro Codes and spent most of an entire day researching the sordid past this poor house had been put through. I pulled all records of permits (which covers pretty much all work done on on buildings in Davidson County except paint and wallpaper type renovations, installing a driveway or a fence, or replacing less than 33% of the roof.) I also talked to the chief building inspector and many other inspectors there. (It was fun, and they all reminded me of my grandpa. :))
Well, it turned out that the owners never had permits for any of the additions they did, which also included a deck and an aboveground pool. But that was just the beginning. In 1992, Metro Codes sent out an inspector, who made up a LONG list of code violations, including the lack of permits for the deck and pool (they didn’t catch that the original addition also had no permits; maybe the deck and pool were being worked on right then and that’s why they noticed.) Codes was also called out in 2004 for trash in the yard, and possibly other times too. In Davidson County, there are 15 inspectors for 500 square miles, so it takes a LOT of complaining by MANY people to get them to go out to a site. The owner was ordered to make repairs. Well, four months later, in
April 1993, he hadn’t, so he was sent a summons and a court date in May 1993.
That’s where the trail goes cold from Metro Codes’ end. I talked to the original inspector who was sent out in 1992 (he’s still there.) He didn’t specifically remember those people, but he said that if the case had been settled one way or the other, the result would have been included in the official file, which it is NOT. He believes that it somehow “fell through the cracks” at the Davidson County General Sessions Court. The thing is that the owner said in writing in late 2006 in the seller’s disclosure that she doesn’t know anything about any problems (I have a copy.) But Metro Codes has an official document in its files that proves she DID know in 1992, and that these code violations were NOT fixed-- there’s no evidence they were EVER fixed, and if there was, Metro Codes would have that. Doesn’t this mean that she was fradulent on the seller’s report??
That’s still not the end of all the fun, though, and that’s because of the court case. It took a LOT of digging to find the person at the Environmental Division of Sessions Court who could find this information by pulling old documents, and by the time I found her, she’d gone home on Friday. So I’ll talk to her next week. The inspector who actually was on the original case from Codes’ end, remember, believes that the case was never actually closed. Metro Codes has a short statute of limitations-- if an owner slipped through and didn’t fix a violation more than 4 years after being cited, they can’t be forced to fix it after that by Codes-- but I already know that the county court does not operate on that same statute. (I just don’t know what theirs IS yet.) So isn’t it at least possible that the case NEVER expires, and that it could be potentially reopened at any time? And that if they find the same violations still existing-- which I know for a fact that some of them still do-- the owner could be dragged back into court? And that this could even be true if the house has a NEW owner??? Well, I’m going to find out THOSE things next week.
The final fact is that four, count 'em four sales have fallen through on this house in the past year, and it’s been on the market for almost a year. With all of them, I do know that it happened pretty late in the game. I doubt anyone else did the kind of digging I did and am doing (I was an investigative reporter for YEARS,) but my guess is that it was after the inspection. I wouldn’t be one bit surprised to hear that the entire floor, subfloor, and joists have to come up in that addition, and that MAY very well not be all. (I seriously wonder if there’s bad foundation news…) I talked to a building inspector friend of mine, and he said that although I’d have to wait for the inspection on Monday, it sounded to him like they’d have to tear out to the ground and start over with that floor, and that he’d seen this kind of thing before when homeowners tried to save money by using unlicensed contractors.
But here’s the thing. The inspection (for me) is on Monday. I have a great inspector, and I’ve already told him about what I’ve found at Metro Codes. IF he comes back and says that the problems are fixable, but that it’ll be around $15,000 (or less, or a little more would be okay too) it might very well still be worth it to me to buy this house IF the owner comes down enough on the price. She’d be nuts not to, IMHO, because she’s really painted herself into a corner. She LIED on the seller’s report and the proof is in official files. (Why do people do this to themselves???) Doesn’t this legally have to be on the seller’s report from now on (well, not that she lied, but that she DOES know about the problems?) Isn’t her realtor going to force her to do it now that I found out about that Metro Codes document, because otherwise it’s just putting himself at risk? Who on earth would ever buy this house besides a developer who’s just going to tear it down anyway? And can you imagine how they would lowball her, knowing they were her only chance for selling the house?
If the repairs are $15,000 or less, I want to offer a fair price. I do not want to take advantage of this person even though I am NOT happy about that seller’s report thing. Who knows why people do desperate things? I think she and her husband may have just made a series of bad decisions when they built the additions, it turned out to be a disaster, and it just snowballed. According to her agent, she is DESPERATE to sell the house (strange thing for the seller’s agent to say, it seems to me. Maybe he figures there’s no point in trying to hide it!) I don’t want to behave unethically because she’s doing it. I was talking to a contractor about this, and he said, “Well, she’d cheat you, if she could.” I said, “Maybe so, but that’s on her conscience. I won’t have it on mine.”
BUT… the price really would have to be fair. The bid I made and they accepted, contingent on the house inspection (without any of this knowledge having yet come out, of course!) was $90,000, plus they’d fix the floor, pay $3000 of the closing costs, and put a year warranty on everything left in the house (plumbing, water heater, appliances, wiring, etc.) That’s low for the neighborhood, but not completely out of line. That exact area hasn’t been truly gentrified yet, although it’ll happen, no doubt about that. So cute, with a park and an elementary school, lots of trees, good neighbors, etc…
Knowing what I now know, I suspect that that price will have to come WAYYYYYYYYY down. I already know that the owner does NOT have the money to fix anything before selling. So I would have to put $15,000 cash of my own into it and come up with that immediately to pay contractors. That I can do, it’s ot a problem, and it won’t be a problem with my mortgage lender either, since I’ve already checked on that. My financial situation is very unusual, with an unimpressive cash flow but lots of liquid assets and perfect credit. But very few people can do that. I don’t think anyone else is going to come along and buy this house. If anyone did and then found out about some issues after the sale, I can’t see how they could lose a case against that owner for fraud, given the Metro Codes evidence (and there may very well be much more to learn at Sessions Court, too.) Developers really haven’t targeted that neighborhood yet. The owner is REALLY stuck, but if the price goes low enough, I’ll buy. In that case, what’s fair to offer? $60,000? $50,000? $40,000? What about if the house is totally unsalvagable, and it only has value as a lot? The Davidson County property tax appraisal value of just the land is $13,700 (those are extremely accurate to true sales value in that neighborhood; I checked that, too.) So in that case, is THAT a fair price, or maybe $15,000? $18,000? What would a developer pay for this house?
I guess I don’t really know for sure yet. If the inspector tells me it’s completely TOTALLY hopeless and really does need to be torn down, then I do think I’ll back out. There are other houses to buy! But if it needed a certain level of repairs, well, that’s the kind of situation I’ve been looking to get into-- buy cheap, have contractors do the structural stuff, do the cosmetic work and landscaping work myself (love it!), and live there for at least a couple of years. But… I want to behave ethically here. I will not take advantage of this sad and desperate person who owns the house.
This was a LONG post, y’all, and if you’ve borne with me thus far, many many thanks. Please let me know what you think about this situation, or any aspect of it. All advice appreciated!