TIP FOR ALL REIs - Posted by SS

Posted by Jerry on April 16, 2000 at 18:01:27:

Don’t be on the legal recourse. When I purchased my house six years ago, the toilet in the lower level overflowed when it rained really heavy one night (three weeks after moving in). Called realtor, contacted seller, hmmm…never happened before they say. Happened again 2 months later, this time sewage. Ruined the carpet, had to replace ($800). Called health department to check it out, said I needed new septic system ($7100). Guy that did work said that his professional opinion was that there was no way that it didn’t happen before I bought the house; he even wrote a letter to that effect.

Anyways, the seller and I signed an arbitration agreement. I called the seller, sent him letters, to no avail. Paid to get the arbitration going ($500). Documented my case THOUROUGHLY. Even the arbitrator said so in his judgement statement. Seller basic line of defense was that he signed the disclosure statement saying nothing was wrong. Guess what? The arbitrator found for the seller basically just because of that fact. After I presented my side and the seller did his, the arbitrator made a comment to that effect, to which my answer was “so, he can lie and I have to deal with it?” Maybe the wrong answer.

Bottom line is I had to borrow around $10,000 to get everything fixed since I didn’t have any savings left from buying the house. Still paying on it.

I don’t know…it all made me think that the disclosure statement is suitable for wrapping fish.

To top it all off, the county says that they might run sewers down in the next few years…

Gotta love it…

TIP FOR ALL REIs - Posted by SS

Posted by SS on April 12, 2000 at 24:16:38:

PLEASE, PLEASE, PLEASE, learn from my mistake! ALWAYS get an inspection before purchasing a property! I bought the CS program and purchased my first property 27 days later. One month later the air conditioner went out…BOOM $1000, then 5 months later the septic system went out. BOOM $6500. This property had two dwellings, and while the one side was being revamped we decided to redo the other side at the same time (one loan) so we wouldn’t have problems with either septic system for at least a while. Found out the second didn’t have a “real” septic. Can we say “make shift”? BOOM $3500. It consisted of a tin culvert with a piece of tin over the top. I am now in my 5th month of legal dealings trying to recover my $10,000 by spending $2500 in legal fees. My only salvation has been that the seller disclosed that there were no problems witht the septics.

PLEASE, always get an inspection ($200-$300) and even a home warranty ($300-$500). I really wish we had.

Good Luck!


Re: TIP FOR ALL REIs - Posted by Dorothy

Posted by Dorothy on April 13, 2000 at 08:36:05:

My sympathies and deepest commiseration! I, too, have made my first mistake. Last summer, three months after purchasing the course, I bought a duplex for $60,000 with a good cash flow, but I, too, didn’t request an inspection and have regretted it every month since. The realtor said things like, “I believe he had this replumbed” and “He indicated to me that it’s been rewired.” Idiot that I am, I took that at face value and have nothing in writing. We found a multitude of plumbing leaks, rotted joists and floors from those leaks (all had been carpeted over to hide it). We found freaky wiring, frayed wiring, wiring with no visible shut off point, a collection of run of the mill extension cords in the cellar, crossing from one half of the duplex to the other. We found a junction box with exposed wire inside a wall, resting about 1 1/2 inches from a dripping shower pipe. We found a section of cellar that the realtor never showed us with a completely rotted through foundation beam. What a mess! I try to stay positive, and hope that month by month everything will come together, but in the meanwhile those repairs are eating up everybit of cash flow, and I stay quite uneasy, waiting for the other shoe to drop (i.e.something major like heating system, etc, to fail). The most humiliating thing about it is how gullible I was. Many of these things EVEN I should have noticed, or thought to check for, but 20/20 hindsight is a wonderful thing, you know! Yes, everyone out there, get your inspection! They may not cover everything, but they will notice obvious things that the untrained never think about.

Re: TIP FOR ALL REIs - Posted by chris

Posted by chris on April 12, 2000 at 03:59:21:


Sorry to hear about your “learning” experience. As JD mentions an inspection and warranty are not blanket protection. Before hiring an inspector or buying a warranty it is recommended that you go through the fine print. If hiring an inspector I would try to get one who is an ASHI(American Society of Home Inspectors) member to give you some confidence in their level of experience. I would always ask what is NOT covered within the property or on the property grounds.

To give an idea of what a home warranty does NOT cover I copied one which is fairly standard from a company that will remain unmentioned.

Electrical System (Buyer and Seller)
Covered: All components and parts, including built-in exhaust fans, ceiling fans, except;
Not Covered: Electronic or computerized energy management, lighting and appliance management systems, light fixtures or bulbs, alarms, intercoms, cable television/satellite wiring, improperly installed wiring, power failures or surges, direct current (DC) wiring, aluminum wiring and breaker panels damaged by saltwater corrosion.

Telephone Wiring (Buyer and Seller)
Covered: Telephone wiring used primarily for residential phone service located within the walls of the main dwelling.
Not Covered: Phone jacks, plugs, lights, transformers, and other power units, cover plates, phone units, answering devices, burglar alarm circuits, phone fuses, wiring owned by the telephone company.

Air Conditioning System (Buyer Only)
Covered: All components and parts of Ducted electrical central air conditioning units, ducted electric wall units and water evaporative coolers. Note: — will provide up to 3 nights lodging at a hotel or motel, at a maximum rate of $50 per night while repairs are being made should the air conditioning system fail, and the outside temperature is above 90 degrees F.
Not Covered: Gas air conditioning units, condenser casings, registers and grills, filters, electronic air cleaners, window units, non-ducted wall units, water towers, humidifiers, damaged ductwork.

Water Heater (Buyer and Seller)
Covered: All gas or electric water heating components and parts, including circulating pumps, except;
Not Covered: Solar water heaters, solar components, holding or storage tanks.

Heating System (Buyer Only)
Covered: All parts and components including gas or electric furnaces and wall units. Note: — will provide up to 3 nights lodging in a hotel or motel, at a maximum rate of $50 per night while repairs are being made should the heating system fail, and the outside temperature is below 50 degrees F.
Not Covered: Solar heating systems, baseboard heaters, fireplaces, filters, clocks or timers, grills or diffusers, oil storage tanks, humidifiers, air purifiers, damaged ductwork.

Plumbing System (Buyer and Seller)
Covered: Leaks and breaks of water, drain, gas, waste or vent lines (except when caused by freezing), toilet bowls, tanks and mechanisms, valves for shower and diverter, angle stops, risers and gate valves, toilet wax ring seals, permanently installed sump pumps, built-in bathtub whirlpool motor and pump assemblies, stoppage in drain vent and shower lines to 125 feet from access points.
Not Covered: Fixtures, bathtub and showers, shower enclosures and base pans, sinks, toilet lid and seats, caulking or grout, septic tanks, water softeners, pressure regulators, inadequate or excessive water pressure, flow restrictions in fresh water holding or storage tanks, saunas or steam rooms, outside sillco-cks and other hose connections.

Ductwork (Buyer Only)
Covered: All components and parts including duct mounted exhaust fans.
Not Covered: Grills or diffusers, insulation wrappings

Appliances (Buyer and Seller)
Covered: All components and parts of a Built-in Microwave, Dishwasher, Range/Oven, Trash Compactor, Primary Kitchen Refrigerator, Garbage Disposal, Central Vacuum System,or Kitchen Venthood, except:
Not Covered: Clocks (unless necessary for the operation of the appliance), racks, handles, knobs, baskets, rollers, shelves, dials, lint or filter screens, ice maker, ice crusher, beverage dispenser, meat probe assemblies, rotisseries, door glass, lock and key assembly, soap dispenser, interior linings, any appliance already covered under a manufacturer’s warranty.

Optional Coverage (for buyer only)
Pool/Spa Equipment (Buyer Only)
Covered: All components and parts of the heating , pumping, and filtration systems. Both pool and spa are protected if they use common equipment. If they do not use common equipment, each has to be covered separately at an additional charge.
Not Covered: Cleaning equipment, solar equipment, pool sweep motors, lights, liners, concrete encased or underground electrical, plumbing or gas liners, jets, structural defects, damage due to rust and corrosion.

Well Pump (Buyer Only)
Covered: All components and parts of residential water well pumping systems, except:
Not Covered: Piping or electrical lines from the main dwelling to the pump, re-drilling of wells, well casings, pressure tanks, holding or storage tanks.

Washer/Dryer (Buyer Only)
Covered: All components and parts of clothing washing machines and dryers, except:
Not Covered: Plastic mini-tubs, soap dispensers, filter & lint screens, knobs and dials, venting, damage to clothing.

Freezer (Buyer Only)
Covered: All components and parts of upright or chest type freezers, except:
Not Covered: Shelves, racks, handles, baskets, interior linings and shells, lock and key assembly. NOTE: — will reimburse you for actual food loss up to a maximum of $100.00 if loss is due to a malfunction covered by the contract. If you are entitled to reimbursement by other warranties or insurance policies, — will only reimburse the portion not covered. No coverage for food loss is available on refrigerators under this contract.

Roof Leak Repair (Buyer Only)
Covered: — will pay up to $500 to repair water leaks caused by normal wear and deterioration in roof structure of the main dwelling during the coverage period, provided that the roof is water tight and in serviceable condition at the time of escrow closing, or the effective date of this Warranty Plan, whichever comes first. The homeowner will pay a $60 service call fee for each service call to repair roof leaks.
Not Covered: Pre-existing leaks, leaks caused by improper maintenance, damage by persons walking or standing on the roof, equipment improperly mounted on the roof, construction or repairs not performed in a workmanlike manner, damage caused by fire, lightning, tornados and hurricanes or other acts or nature. Flashings, gutters, down spouts, skylights, add-on roofs, cracked or missing tiles, decks, garages, and structural leaks are not covered.


Re: TIP FOR ALL REIs - Posted by JD

Posted by JD on April 12, 2000 at 24:35:37:

It is unlikely a home inspection would have turned up the problem with the septic or the AC. The warrenty may have covered the AC, but certainly not the septic.

Re: TIP FOR ALL REIs - Posted by chris

Posted by chris on April 13, 2000 at 09:59:39:


Regardless of whether you purchased this property as-is or not, if the seller did not disclose defects that they knew about you can pursue legal action against the seller. It sounds like most of these “repairs” that the seller performed were not up to code. Please look at getting an expert opinion on this instead of paying to fix all of these flaws out of pocket. A consultation with a real estate attorney may be something that would be a good idea before this gets to be more of a nightmare.

-Just my opinion, Chris