I recently had undisclosed and unpermitted structures become an issue with two of my recent transactions. With REO (bank owned foreclosure) properties the seller (the bank) is very reluctant to disclose anything about the property. They refuse to sign any transfer disclosure or other statewide disclosures that are required in traditional sales. If the buyer later discovers there are unpermitted structures on the property, what can they do? One of my buyers recently canceled an escrow because they found unpermitted modifications in the garage. They believed this could cause a problem with the city in the future when they try to sell the property. How likely is that to happen in Fullerton, CA? Another house I sold in Buena Park, CA had an open permit on a covered patio that seemed to be up to code, but it was never signed off. My clients, as new home owners, were not able to get additional permits to upgrade some electrical work they wanted to do until this issue was resolved. I confirmed with the title insurance company that they would be able to cover this. Has anyone else encountered issues regarding undisclosed & unpermitted structures with REO properties? What to do?
Thanks in advance for your responses.
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