What I'm Seeing Now

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Intentionally Trying To Hide Problems On A Flip - Chapter 1

Intentionally Trying To Hide Problems On A Flip - Chapter 1

These next couple of posts are to show how investors/flippers sometimes try to palm off problems onto others.  It's disgusting.

Walking around this little log cabin by a local lake I saw so many things that bothered me, but I did not know the entirety of what had happened.  Two different neighbors saw me and asked me if I knew the history of recent work done on this house. 

WHAT THEY EACH HAD TO SAY WAS CONSISTENT, SO THEY DIDN'T MAKE IT UP, AND THEY WERE EXTREMELY HELPFUL!  BY THE TIME THEY WERE DONE, I UNDERSTOOD WHAT I HAD NOT BEFORE AND WAS VERY ANGRY.

A lot of the material on the logs did not look like wood.

As you know, home inspectors are not destructive, so I did not try to see what the material might be.

After speaking with the neighbors I went back to a previous spot and, while looking away, I turned to look back at the log and noticed that a spot had been exposed!  I did not see how it happened.

The wood was full of termites. 

It was soft. 

Tapping elsewhere I could feel that most of the logs were very slathered with a putty to cover soft material.

Sticking my pen into the wall near the window, it went right in.

There is only one reason it would go in so easily!

I could probably have done the same thing all over the house.

IT IS DISGUSTING TO THINK THAT SOMEONE WOULD GO TO SUCH LENGTHS TO MAKE WOOD LOGS THAT ARE OBVIOUSLY SO SEVERELY DAMAGED BY, AND RIDDLED WITH, TERMITES THAT THEY ARE STRUCTURALLY UNSOUND.  AND THAT THEY ARE TRYING TO SELL THIS TO SOMEONE ELSE.  DISHONEST THIEVERY ABOUNDS.

On the opposite side of the house some new windows were installed in the kitchen.  They offer a view of the lake.

A little box was created to house them. 

Above the windows was wood siding.

Below the windows was wood siding.

All this new material covered the entire wall.

I had previously taken a photo of what was inept flashing and a very unprofessional window installation.

What I learned from the neighbors was that this particular wall used to be just feet from a 6' high trunk that was termite riddled.

The trunk is gone, ground down below the soil.

But the wall itself was so damaged, and therefore so structurally unsound, that rather than slather their pretty make up putty over it, they simply covered it with pretty new stuff!

It's wonderful, new siding and a beautiful double kitchen window!

AGAIN, I WAS SO DISGUSTED I WANTED TO SPIT!

Then my clients arrived!  We had a nice talk about my findings.  I asked if the listing agent and investors could be reached by phone so they could come over and we could all chat.  Somehow they were not available, and they all knew that we were doing this inspection.  I asked the agent to leave them messages to call me.  They have not.  Gee, why?

My recommendation:  when substantial work has been done to a flipped property, it might just pay to have a talk with the neighbors.  Who knows how much information they might be able to give!

 

 

 

Jay Markanich Real Estate Inspections, LLC  

Based in Bristow, serving all of Northern Virginia.

Office (703) 330-6388   Cell (703) 585-7560

www.jaymarinspect.com


Comment balloon 34 commentsJay Markanich • March 15 2013 05:37AM

Comments

oh boy  love the story of your pen going right through... thestuff you find out there is sad and funny.

Posted by Stanley Stepak, Realtor - Avon Lake, Avon, Bay Village, Westlake, (Howard Hanna - Avon Lake, OH) over 6 years ago

Stan - I could have stuck it all the way into the house.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

I always wonder how these homes even get under contract.  And to think that, unless it's government type loan, many lenders no longer require a termite inspection.

While this property for sale was owened by an investment owner, I've seen similar attempts to hide defects by home owner/occupants. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 6 years ago

One of the main reasons I try and stay clear of flippers when they can be ID. It  is very common problem here in South Florida, as well as covering up code violations as well.

Posted by Chuck Mixon, Cutler Bay Specialist, GRI, CDPE, BPOR (The Keyes Company) over 6 years ago

Jay -- I know you don't deal with the real estate paperwork, but aren't there disclosure laws there, where the seller has to disclose things he knows are bad?

Hope you have a great weekend!

Posted by Steven Cook (No Longer Processing Mortgages.) over 6 years ago

Did you get your pen back? Or did you have a tug of war with the termites? Good thing it wasn't a pencil... you would have pulled back a nub! I have never done a log home, but I'm sure it could be a challenge. Flipper strikes again!

Posted by Fred Hernden, CMI, Albuquerque area Master Inspector (Superior Home Inspections - Greater Albuquerque Area) over 6 years ago

WOW! is all I can say. Caveat Emptor still prevails. It was fortunate that the 2 neighbors approached you with their observances. Also great that the potential buyers had you as an inspector. I'm still always amazed to what extent some people who go to defraud others. The love of money is the root of all evil.

Posted by Doug Dawes, Your Personal Realtor® (Keller Williams Realty - Topsfield, MA) over 6 years ago

That's awful....all buyers should have termite and home inspections!

Posted by Linda Greco Rich, ABR, SRES, Harford County Specialist (Exit Preferred Realty) over 6 years ago

You have to wonder why the investors bought it in the first place. Good inspecting, Jay, and a great article for both buyers and sellers.

Posted by Kathryn Acciari, Brand Ambassador and Business Coach (Century 21 Real Estate) over 6 years ago

This is just disgusting. Sounds like it might be time to start over: both for buyer and seller. The value of a good home inspector will save buyers money and future disappointment. Good job. 

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) over 6 years ago

Jay, That is really sad, I hope the buyers walked away from this one. I also would hope the seller & their agent disclosed these things.

Posted by Frank Laisch, "The Insurance Guy" over 6 years ago

We don't have issues with termites here in the Rocky Mountains but we do have issues with flippers. They are everywhere. We should have Flip Inspectors along with Termite Inspectors!

Posted by Charlie Dresen, Steamboat Springs, CO e-Pro (Steamboat Sotheby's International Realty) over 6 years ago

Let me guess, Lake Jackson?

Posted by Jim Gilbert, The Gold Homes Team (Keller Williams Fairfax Gateway) over 6 years ago
Thank you for sharing the story Jay. One time I showed a house that has dry rot all over places but the seller tried to cover them with thick, new paint!
Posted by Wika Hutchinson, Broker, CRIS, SFR, CDPE over 6 years ago

Lenn - there is too much machination going on to get into here, but the buyers' families were in two camps - buy and don't buy.  After my explanations and demonstrations I am a hero to both groups.

Chuck - if it could be covered up here it was.  But I have a few tricks up my sleeve too.

Nope Steven.  VA is a no disclosure state.  Caveat emptor.  The agent is supposed to disclose known problems, and therein lies the crux of what is going on here...

I used it as a fishing pole for some fresh protein Fred.  Fresher than anything I age in college, for sure.  A little pepper and, well, wow!  Log homes are always a challenge.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Doug - I passed one coming in, who was walking his dog.  He thought he knew where I was going and followed me!  The other neighbor lives across the street and approached me unrequested.  They were both fit to be tied.

Linda - in this case yes!  And they got a good one.

Kathryn - location and maybe at an auction.  I am not clear on that one.

Pamela - the buyer surely is now.  It didn't take long for them to see they needed to move on.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Frank - me too, but there is no disclosure in VA.  Home inspectors are HIGHLY necessary here.

Charlie - they are a problem, at least the unscrupulous ones.

Jim - yep.  And interestingly just across the lake where my parents bought a lot in the 40s.  I sold it when my mother passed many decades ago.

Wika - well whaddya know!  Cover ups everywhere!  I'm shocked I tell you, truly shocked...      ;>)

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

As a real estate agent who flipped a house, this makes me very angry as well.  I went out of my way to put out a very nice product to the point where I actually lost money.  However, I know that I sold someone a solid, well-done house that isn't going to cause them problems down the road!

Posted by Marc McMaster, Putting my clients before myself (RE/MAX Centre Realty) over 6 years ago

Marc - it sounds like you are an honest person who believes in the Golden Rule!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Typical for our area.  No surprise.  Business as usual.

Sure, if the roof is leaking, just paint the ceiling...

Sure, if there are termites, just camouflage it...

 

Now this becomes a material fact that the listing agent needs to disclose...(good luck)

 

Eve in Orlando

Posted by Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 6 years ago

Ah, but Jay!  In Virginia both sellers and their agents believe they have a license to cover up problem, arguing that the Commonwealth is a "Caveat Emptor" jurisdiction.  So, yeah.  Conceal your heart out, although it's true that the neighbors can always rat you out, it's a small riisk when you can unload a termite-eaten lipstick on a pig flip job. 

Oh my!  Does this sound, um, sarcastic?

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 6 years ago

This should be a lesson for all buyers out there as well as all flippers to be! How low can they go?

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 6 years ago

The definition of House Inspector is Residential Detective. I've always thought the best inspection reports were the ones that I used to prevent my client from buying a money pit.

thanks

Posted by Mike Warfel, Associate Broker (Bauer-Reno & Assoc.) over 6 years ago

Eve - it's so comforting to know this is widespread!

Pat - yes, the sarcasm did drip a bit.  By the time the neighbors got done with me, because I asked them questions, I was very angry.  I still want to speak with the sellers and agent.

Apparently pretty low Gary!  This is only the first salvo.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Mike - sometimes that happens!  But I don't go about trying to tell people whether or not they should buy.  In this case I was pretty forceful though.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Good Morning, Jay. Maybe that's why they call them:

Flippers, Flippers, cutting the corners,

No one can be,

Cheaper than he...

Posted by TeamCHI - Complete Home Inspections, Inc., Home Inspectons - Nashville, TN area - 615.661.029 (Complete Home Inspections, Inc.) over 6 years ago

 

You just wanted everyone to sing the jingle Michael.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Flipper was not counting on you for an inspector and was hoping that his "once over" whitewash would produce the buyer of his equity dreams.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) over 6 years ago
This is a situation where you love the nosey neighbors! If they're out and about, I always will go and chat with a neighbor during an inspection and sometimes find out interesting info regarding their neighbor's house.
Posted by Joshua Frederick, Home Inspector in Defiance & all of Northwest Ohio (Home Inspector for ASPEC Residential Services, LLC) over 6 years ago

S&D - this was the first of many things in this house.  It was eye opening.

Joshua - they came to me!  They were afraid for me as a potential buyer, or any potential buyers!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

Morning Jay although Uncle Bob is an interesting person I asked him and he said he had nothing to do with that.  I was thankful he has not gone that far down the hill. 

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) over 6 years ago

This was too big a job for any single guy James.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

In this day, do these flippers believe the buyer won't have an inspection? If they put enough lipstick on the pig, the buyer will be so wowed as to skip the home inspection. 

Posted by James Quarello, Connecticut Home Inspector (JRV Home Inspection Services, LLC) over 6 years ago

That seems to be the thinking Jim.  Nobody will notice, at least that's the great hope.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 6 years ago

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