Wednesday October 7, 2015
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As unlikely as this may be considering the number of houses on the market with a long, sworn to, history of ownership and usage, it is exactly the kind of thing that might nail someone up here in the Rim Country during the slump in housing, so you need to know about it.
Again, let me repeat that the chances are small, but if you happen to be the one victim that's all it takes--one. Read what happened to the Hankins family in Klamath Falls, Oregon.
Jonathan Hankins and his wife Beth wanted to take advantage of the current slump in the housing market by buying a foreclosed home for themselves and their two year old son. They found just what they wanted, something they could really afford--a $36,000 "fixer-upper."
The home was mostly in need of repairs to things like broken or boarded-up windows, floors that needed redoing, walls that needed paint, and other repairs that the family felt they could do themselves and pay for as time went on.
They bought their new home from Freddie Mac, thinking that dealing with a government agency was all the protection they needed. They moved into it during the third week of June and began work.
Within days, Jonathan Hankins began having a severe dry mouth unlike anything he'd ever had before. He thought it was allergies at first, but then his wife Beth, an emergency room nurse, also began having a severely dry mouth. And what was worse, she developing odd sores.
To make a long story short, the symptoms progressed for weeks, got much worse, and showed up in their two year old son who spent a lot of time on the floor as all young children do.
When they mentioned what was happening to one of their neighbors, he said, "It's probably the meth."
That was the first time they learned that their newly purchased home had been a meth house. When tested at their expense, it showed 80 times the amount of meth starting materials legally allowed in Oregon.
Guess what happened then?
Obviously, homeowners everywhere are required by law to notify buyers if a house was used to produce dangerous drugs, or is otherwise unsafe or flawed in some way, but what if the home you buy belongs to a giant lending company that puts ironclad clauses in the fine print of its contracts, and is so big it could tie you up in court for years if you tried to sue it for selling you a meth house without warning?
In two words, you're screwed!
That's what Freddie Mac did to the Hankins. When the Hankins called the lending giant they were stonewalled for two months, and when they finally got an answer it was (a) Hey, we didn't know the place had been a meth house! (b) Read your contract; it says you were free to make any kind of tests you wanted before you bought. (c) You signed on the dotted line and are now screwed.
What are the Hankins doing? Trying to make up their minds whether to take the loss of everything they put into the house, including nearly two months of hard work, dump the joint, and ruin their credit, or to spend the thousands of dollars it would take to make it inhabitable.
They also have gotten up a petition that now has 191,000 signatures on it, but a good question is: What are they going to do with it? Paper the walls?
So what about you? Are thinking about buying a house that belongs to Freddie Mac or some other lending giant?
Here's what Freddie Mac says will happen if you find out something after you sign, "The buyers were given every opportunity to do an inspection or conduct any test they wanted to conduct."
And here's what Jonathan Hankins says:
"Freddie Mac won't take any responsibility for misleading us about the safety of our home, and attorneys just tell us that we should've read the fine print." He adds that buying a fixer-upper in today's drug-soaked world is like playing Russian Roulette.
Freddie Mac, by the way, though created by Congress is NOT a public institution. It is a private, for-profit lending agency, so you can trust it exactly the same way you can trust any other giant corporation.
Your safe recourse when dealing with Freddie Mac, or anyone else who could tie you up in court forever, is going to cost you money: Get a lawyer to write an ironclad clause which places the responsibility for any unexpected after-sale discovery where it should be--on the seller.
Will you be able to get a giant corporation to sign a clause like that? Who knows?
But if you buy without one?
Ever heard of "as is?"
Crap, I had a long post on here and it evaporated. will try later. Sudden link should have to pay for my stress pills.
Buyer beware. If it sounds to good, walk off fast. If not, then read every line in any papers you sign even if it takes you all day. If you don't understand what it means ask.
Realtors do have papers that sellers have signed saying what may be wrong with the house. Even if someone died in it 10 yrs ago. They don't always show it to the buyer.
Hire an inspector but follow him around and make sure he inspects everything, including checking for mold and knows what he is doing. Get references on him first. If the house is not built on a concrete slab, make sure he goes under the house.
We sold our first house we bought up here and the buyer hired an inspector. He didn't notice there was a cupboard door missing, but he did go under the house and the builder had run the electric wires under there with no covering on them. A disaster waiting to happen.
A mouse or something had chewed some of the wires almost in to. We had to have an electrician replace all the wiring under the house. We didn't get an inspection first.
Do as I say not as I do. (:
Had a longer better post earlier but it went away while I was reading it.
"They don't always show it to the buyer."
I know that for a fact. When we were buying one house, or perhaps I should say thinking of buying it, I had a quiet suspicion that someone in the group wasn't being entirely open with me. So I brought in a statement which I told the realtor he would have to sign before I would go any farther in the process. All it said was, "I have given to this buyer a copy of all paperwork of any kind which I have in my possession pertaining to the house at (legal address). You should have seen the look on someone's face. There was a lot of hemming and hawing, the end result of which was the fact that a foundation crack running completely across the house (which had been plastered and painted over) had not been brought to my attention. That was bad enough, but the fact that right behind the house, but conveniently out of sight, and quiet during the summer was a private school, a junior high, which was the reason the sellers were getting out, and also the reason the house price was so low ($85,000 for six bedrooms). There was, believe it or not, a gate to the school property in back which we had not been shown and which, for some legal reason, I could not get rid of if I bought the house, through which kids regularly went back and forth to school. I not only didn't buy the house, I turner the realtor in, and kept monitoring the process until I saw some appropriate action taken.
Can you picture what kind of nightmare a place like that would be?
"Hire an inspector but follow him around and make sure he inspects everything, including checking for mold and knows what he is doing. Get references on him first. If the house is not built on a concrete slab, make sure he goes under the house."
That's the best advice anyone ever put on paper. I have never had a house inspection which satisfied me until I forced the inspector to do his job. And the best advice I ever got came from a title company that gave me a BIG warning about one inspector.
I'll say this much, when I was buying up here I went to the realtor in Strawberry (name forgotten). One of the agents (name also forgotten, and has moved to Nevada) did me a big favor. Lolly and I were looking at a house in Strawberry. It looked like just what we wanted, good size, neat, clean, well kept, nicely fenced, and a good price. I think we would have bought it except for one thing: As we were standing out front, looking back at the house after having been inside, the agent took me by the shoulders and turned me around so I was facing the other side of the street. There was the biggest home junk yard I have ever seen. It looked like something out of Ma and Pa Kettle. We thanked her and bought another house--the one I'm in--through her. That was one fine lady. She knew that people often get so excited about a nice place that they fail to check things they should check. I wish i could remember her name, or at least the name of the realtor. Maybe somebody knows it.
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