He could win a lawsuit against the listing broker if he can find evidence that the listing agent either knew something and didn’t disclose, or should have noticed something like a big crack that was obvious.

The house down the street where the owners disclosed the “cracked foundation with the epoxy fix” is now pending–with contingencies as of this morning. It was listed for $599K for months and months with no takers. Recently, the owners dropped the price to $499K, and that’s its pending price.

I’ll follow this and see if it closes in 30 days or comes back on the market. The prospective home buyers have “bit” with the $499K list price, although there were no other takers for months. I’m curious whether they are locals or “out-of-state” buyers. It will be interesting to see how it all turns out.

The owners paid $207K back in 1997 as a “new build” but the bankrupt developer didn’t tell them about the cracked foundation. They chose the “epoxy fix” after the 1999 lawsuit was settled.

These new buyers are courageous. Or they just really, really want to be homeowners. I’d never buy it. Then again, I was married to a contractor for nearly 21 years. And integrity of any house is only as good as–you guessed it–the foundation.

I just googled “cracked foundations” and this came up: “Epoxy sealing a crack works great, but if you are only diverting the water to the next weakest spot on your foundation you are only chasing a problem.” (Um, the whole problem is the entire foundation IS quick-set cement!)

Yep, no doubt about it, those folks who are now in escrow must love skydiving ‘cuz that’s how it all feels to me…

Believe me, Jim, the 30-year owner cared! Like REALLY cared. (The girlfriend not so much, but yeah, she’s NOT the owner.) He listened to every one of my comments and eagerly took my home phone #. We talked for at least 15 minutes (and yeah, the ice cream I was bringing home did melt.) I never thought the girlfriend would drive “home” right at the second I was sitting in my car pondering the situation. When I saw the garage door open, I literally let out an audible groan.

I find it incredibly heartbreaking ‘cuz it’s his FIRST home purchase and he’s a single dad and has (maybe)an 8-year old son (who was playing in the front yard.) He confided to me that he is ALREADY having drainage issues in the back patio area, and I think, he moved in only the last 2-3 days. He hasn’t even completely unpacked yet. I’m trying to discover the closing date. But I’ll can’t call the Assessor’s office until next Tuesday ‘cuz of the holiday. Then it’s on to the city Planning Dept. who has already been a great bunch of guys.

If everything turns out OK, I’m thrilled. If not, at least I can help the young guy with options and how to move forward. He seemed a bit clueless but I think it was just outright shock with my first-hand account. *Sigh* I now know intimately how you felt, JtR, when you had to tell that renter (with video camera rolling) that he was now living in a REO and had 30-60 days to get out. I just never thought I’d turn into a JtR of sorts. How do you do that and stay unemotional, Jim? Ah, that’s right, you have 25 years of real estate experience. You are the ultimate professional, and I’m just a single mom rookie.

This homeowner THOUGHT he had performed “due diligence”, but really not so much. I know what he paid for it(neighborhood low) and it’s an astonishing $219K less than 6/2004 and $170K less than the 6/2008 RE0 price for that home. But now he IS stuck as it was a REO purchase and he bought it “as is”. Unless there is a legal responsibility for disclosure in this case.

He was shocked that I could rattle off every one of his home’s purchase prices over the 13-year span from first-built (Mahalo Excel spreadsheet).

What I want to know is if the seller’s agent (the bank owned it as it had already gone thru two previous REOs) had any responsibility to put this info in a disclosure notice. The listing agent is one I’ve never heard of with a company I’ve never heard of. It’s not your Coldwell Banker, and I think it’s a “one-man office” and the listing has gone through numerous agents.

Or since it’s a REO, the bank had to disclose NOTHING. This house sat for a year since the last REO. Why? I think ‘cuz most locals didn’t want to touch it as they knew the sad history of just those 8 houses on that one street. The really sad news is the owner IS a local. He just didn’t talk to the people I did who REALLY know the history and what actually transpired years ago. He’s only maybe 30.

My last words to him as I wiped away a tear: “Go over to the house down the street when they have another (every week-end) open house. Go this week-end! They can’t sell their house. Why??? Act like an interested buyer.(*He already looked at that home before he bought my old rental), and ask for any and all info about the house. Then maybe YOU can see their disclosure statement and read every word on that form! Why would they disclose their cracked foundation if it had been really fixed after the 1999 lawsuit–like you thought your home was? That’s the question you need to have answered. When you know THAT answer, you can move forward–either with legal options or ‘fix-it’ options. Just ‘cuz a neighbor told you it was fixed–doesn’t mean it ACTUALLY was”

Seriously, it was oh so painful to see right in front of me the poster child for instant first home buyer’s remorse! The agony was written all over the young guy’s face.

I tell ya, it would have made for a riveting reality TV moment…

Help them find out if the material fact of the cracked foundation, which would have affected the sale, was hidden from the new buyers. Then possible legal action could be taken.

- Jerry Springer

Most of this article is about settling soil and moisture problems as the concern. But nowhere is there a word about when Quick-Set concrete is used for the foundation itself! Scroll down to the last paragraph: “Act Quickly!”

Here’s the link:
http://www.servicemagic.com/article.show.Cracked-Foundation.11295.html