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PITFALLS OF BUYING REO PROPERTIES

By
Real Estate Agent with Debby Bright, Real Estate Broker

In California, foreclosure sales are specifically made exempt from the statutory transfer disclosure requirement.  Therefore, it’s anyone’s guess as to what problems may be inherent in the REO property one is purchasing.  Thus it is all the more incumbent upon the buyer to obtain as many inspections as possible, including a general home inspection, a termite inspection, a foundation inspection (if indicated by either the termite or the home inspection), and a roof inspection.  All these inspections could cost between $1,000 and $1,500 but they’re well worth the advance cost considering the possibility of what may be revealed by them.  It’s best to know up front what one is purchasing.  There’s no luxury of having a seller who is responsible for disclosure.   One consolation, however, is that the listing and selling agents are required by statute to disclose to the principals all of the material facts revealed by a visual inspection  “materially affecting the value or desirability of the property that an inspection would reveal” (section 2079(a) of the California Civil Code).