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Buying Foreclosed Properties: The Five Things Realtors Don’t Have To Tell You When Buying Foreclosed Properties

Buying Foreclosed PropertiesYou and your new bride want to buy a house together so you can start a family. You want something affordable that won’t break your bank account or empty out all the loot you received as wedding gifts. So you start looking at buying foreclosed properties.

But be careful. Usually, foreclosed properties in good condition go for market rates especially if the property is under 20 years old. Properties priced under market value could have serious issues. 

Realtors are under no legal obligation to tell you certain things about the history of the house. These issues could impact your decision. Most realtors will lie if they neglect to inform you of a material defect.

They will feed you some bullshit like they had no knowledge of the issues. They will also blame you for not having a thorough enough home inspection if the issue is a structural or a material defect that could impact future value. 

Buying Foreclosed Properties: Realtors Don’t Have To Disclose Bloody Murders 

Buying Foreclosed PropertiesI had a friend who bought an investment property in the Detroit suburbs to use as a rental. He soon found a tenant. However, the tenant stopped paying rent six months later.

The tenant claimed my friend didn’t inform her that a previous owner was murdered in the house by her pimp/drug dealer. She claimed the neighbors had told her about it and she would not have rented the house had she known.

The tenant also claimed she believed the dead woman’s ghost haunted the house. Naturally, the judge laughed at her during the eviction hearing. He told her to pay up or get out. He stated that Michigan law does require landlords to disclose issues like murders. 

My friend sold the house and soon found himself back in court when the neighbors told the new buyer about the murder. The buyer like the tenant lost the lawsuit. 

A Pennsylvania court also ruled 2013 that listing agents are not required to disclose if someone dies in the home. That case revolved around a murder-suicide. You can read about the gruesome details here.

The trial judge granted summary judgment by ruling:

If the murder/suicide cannot be considered a defect legally, or if the Sellers were under no legal obligation to reveal this alleged defect, there can be no liability predicated upon the failure to so inform. Today, we find that psychological damage to a property cannot be considered a material defect in the property which must be revealed by the seller to the buyer.

Buying Foreclosed Properties: Dead Corpses Found In The Property

Buying Foreclosed PropertiesLiving in South Florida you hear about how the remains of dead seniors citizens being found in their homes on a regular basis. Sometimes even years later.

Take the story of investor William Wilson who bought a tax foreclosure in 2014. He soon discovered the 3-year-old decomposing remains of the previous owner, Carmen Garcia-Viso laying on the floor of the master bedroom.

No one knew Carmen Garcia-Viso had died in 2011. The front door of the woman’s home in Cape Coral was locked with four deadbolts. As the lawn grew wildly out of control. The Post Office stopped delivering mail. Her neighbors went about their lives and forgot she lived there until Wilson’s discovery in 2014.

Wilson said it looked like she’d been packing boxes to move, yet she lived her daily existence in a home full of stuff. There was no sign of a purse or wallet. Just junk mail, doctor’s bills and medications and a few trinkets. Wilson hoped a personal letter could hold a clue to lead them to a friend or relative and found it strange that she didn’t have any keepsakes.

Then there is the crazy cat lady in Houston who housed dozens of cats in her attic, Mary Stewart Cerruti.

Cerruti mysteriously disappeared in 2015 and her house went to tax foreclosure. The new owner discovered her remains between the walls of the house. It appears Cerruti fell through a broken floorboard in the attic. Police theorize she was up in the attic feeding the cats when the accident happened. The cats later starved to death. 

Buying Foreclosed Properties: Secret Brothels 

Buying Foreclosed PropertiesI once bought an investment property that on paper looked like an awesome deal. So I bought it without looking at it. I know, dumb me.

When I inspected the house, the bedrooms had been partitioned and were filled with dirty mattresses covered in love stains. Apparently, the previous owner watched Cathouse on HBO one too many times and thought he could be the late Dennis Hof.

The whores who occupied the house also used the backyard to dispose of used condoms.

Let me tell you. You haven’t lived until you’ve combed through used condoms and hypodermic needles with a lawn rake wearing surgical gloves on a hot day. Or hauled smelly love stained mattresses to the curb wearing bio-hazard suits.

A friend who does high court evictions in the UK told me they find this all the time in London. Especially with properties owned by absentee owners from Eastern Europe or Asia.

Buying Foreclosed Properties: Porn Shoots

Buying Foreclosed PropertiesImagine its a Saturday night and you and wife are getting frisky watching soft-core porn on late-night Cinemax in your new home. The two of you are starting to feel quite randy while you are watching some chisel chested Adonis having sex with some big-busted blonde on a kitchen countertop.

However, something seems strangely odd about this scene.

Between the woman’s fake orgasmic screams on TV, you realize that the kitchen countertop is in your kitchen.

Then all hell breaks loose. Your wife freaks out because she just served Thanksgiving dinner to her parents on that countertop.

She’s starts screaming at you to call your lawyer. She wants you to sue everyone involved in the sale.

Except your lawyer can’t do anything.

Realtors don’t have to disclose porn being shot at a property even if they know. They don’t have to disclose it for the same reason they don’t have to disclose a murder-suicide. It is not a material defect of the property.

Linda Fein was in the process of buying $1.7 million home in Paradise Valley, Arizona when she and her husband discovered the sellers produced thousands of hours of porn in the house. Fein said she made the discovery after the agent mentioned that the sellers were in the entertainment industry and pressed the agent for more information. She and her husband backed out of the deal.

Buying Foreclosed Properties: Previous Owner’s Delusions Of Being Walter White

Are You Buying A Former Meth Lab?I have written about people buying foreclosed homes from Fannie Mae or Freddie Mac only become violently ill within days of moving into the house. The owners soon discover the previous owner suffered from Walter White Syndrome and used the house as a meth lab.

Take Jonathan and Beth Hankins who found a “fixer-upper” foreclosure listed by for $36,000. Homesteps is the listing site for Freddie Mac-owned properties.

But their joy of homeownership soon turned into a nightmare. Within days, the family began experiencing extreme dryness in their developing sores in their mouths. The couple’s two-year-old began experiencing intense burning sensations whenever he drank a glass of water.

On the last night in the house, the neighbors informed them that the house had housed a methamphetamine lab.

The Hankins tried to email and call Freddie Mac for seven weeks of emailing and calling Freddie Mac. Jonathan soon became fed up and took to  The petition asked Freddie Mac to pay for cleaning the methamphetamine.  The petition soon gathered 197,000 signatures and did get Freddie Mac’s attention. Freddie Mac refused to assume responsibility.  Jonathan explains:

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. Tell that to my son. Simply walking away will not only negatively impact our credit but would enable banks to continue this trend of severe negligence.

Freddie Mac’s position is and was that the Hankins should have done an inspection. However, a basic home inspection would not have detected meth residues found embedded in the studs or sheetrock.

Read other real estate stories on the FSBO Marketing Solutions Blog.

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