Q: We recently purchased a home that had been foreclosed on by the bank. The terms of the purchase contract were for the property in “as is” condition.
The home inspection report did not say anything about the presence of mold in the house. The basement was a bit wet and stinking but the Realtor told us that it was humidity coming up and that there was pet fecal matter all over the carpet which caused the stink.
After we purchased the house and moved in, we called carpet installation people to put in new carpet. They informed us that there is a lot of mold in the basement which we needed to remediate first.
The mold remediation people inspected the basement and told us that the basement had been wet in the past (possibly multiple times) and the previous owners tried to paint over the mold areas to hide it. But the mold kept growing.
Is the seller (the bank) under an obligation to disclose the mold problem? Is this an action we can pursue against them even though it was an “as is” contract? Should the home inspector have found the mold and warned us about it? Can we pursue any action against him?
Finally, the Realtor said she thought it was humidity and smell from the pet fecal matter. I’m not sure if she genuinely thought it was humidity and pet droppings or she would have said anything to get the sale closed.
What are our options?
A: When you buy property in “as is” condition, whether it was previously foreclosed upon or not, you take the property in the condition that it is in. The action you should consider is against the home inspector who obviously missed a huge red flag (even you smelled something funny!). The agent is under no obligation to find out more about the condition of the home. That is your department. If the agent does know something about the condition of the property and doesn’t disclose what he or she knows, then you may have grounds to pursue a case against the agent and his or her brokerage firm.
I don’t know if you used a real estate attorney to close your deal (someone that you hired to represent you, not someone you paid for who worked for the lender). If not, go find a good one and spend an hour discussing what, if any, legal options you have at this point.
If I had to guess, I’d say that you’re going to have to foot a pretty big bill in order to get this property cleaned up and livable. Hopefully you paid a lot less by buying this foreclosure and you have the cash reserves in order to do what is necessary to make this house something you’d want to live in.
If you want to know what a good home inspection looks like, check out my 22 home inspection videos at www.ExpertRealEstateTips.net.