Ready for a spooky story, a tale from the dark corners of real estate?

Look no further.

“I thought I was doing all of the right things: getting my credit in good shape, saving up a big down payment, hiring an inspector. In fact, my inspector talked me OUT of a different property I was thinking about because he found so many problems. My realtor was referred by a family friend, so I thought I could trust him. I’m fairly handy myself, so I wasn’t worried about minor issues that might come up, but the house was beautifully finished. The remodeler was one helluva trim carpenter. This was my first house purchase, but there was every indication that this was a solid buy.”

He had the house inspected. The inspector performed operational tests and did not detect any major problems. Before closing, a professional replaced a bathroom fan that the inspector noticed was not ducted through the roof but rather was blowing moisture into the attic.

He even pulled records of building permits, finding no work had been done since siding and roofing were installed in 2010. He closed on his first house at $174,000 (obviously, this was not Boston – he’s located in Minnesota) and moved in on May 20, 2013.

There was no paper trail and no way for anyone to know of what was hidden between drywall and concrete.

Problems began to arise on May 23. 

Cupboard doors were never attached to the hinges. Hookup hoses for the laundry machine were connected backwards – hot water was connected to the cold water input and vice versa. No cable outlets were working – when the technician came by he found none of the outlets were even hooked up. Handles fell off the bathroom faucet. Dipwire shelves were not attached to studs and once anything was put on them the shelves tore free from the drywall. A closet had handles installed on the wrong half of bi-fold doors. Water was rapidly leaking through the basement ceiling from the overhead bathroom, and while other problems seemed simply cosmetic this was something that needed to be fixed immediately.

This was when the homeowners called a plumber.

The plumber discovered the shower had been spraying water inside the walls…and the shower manifold was soldered in-place with a blowtorch that had burned the framing of the house. He suspected there were more plumbing problems and building code violations, so the homeowner allowed him to cut inspection holes in the drywall to investigate.

None of the plumbing in the lower level had drain vents (which ensure drain water will reach the sewer). There were no vent pipes in the bathroom walls, and there were six additional leaks inside the walls. The upstairs bathtub drain was illegally connected to the rest of the drain stack. The laundry drain was illegally reduced from a 2” pipe to a 1.5” pipe. The master bathroom shower drain was illegally connected to the wrong size and type of pipe. The washing machine drain was illegally cemented into the sewer clean-out access. An illegal air-admittance device stood in place of proper venting pipes. The dishwasher was hooked up with the wrong type of hose. The garbage disposal was against code as it was wired into a metal switch box without a bushing. In the upstairs bathroom, the water pipes were never fastened to the framing.

This is when the homeowner began his online research, and he discovered what had happened fairly quickly.

The home had last been purchased on October, 16, 2012 for $84,900. The house was then secretly remodeled without building permits of licensed contractors and listed just four months later at a 200% markup. Previous photos of the home on Zillow revealed that the kitchen had been completely gutted and redone with recycled cabinets and low-end fixtures. A closet was removed from the dining room. A major kitchen wall was removed. Most disturbingly, the flipper removed a load-bearing support column in the basement, presumably to make the room look bigger.

The removal of the load-bearing structure put their property and their lives in serious danger. If they did not make structural repairs before snowfall, a large pile of snow may cause the structure to buckle; a city building official determined the house would have to be condemned and the family evicted if the repairs were not made quickly. General contractors began visiting the house, and it became clear that the illegal remodeling had been done intentionally to flip the house onto an unsuspecting buyer. As one contractor stated, “Whoever did this work needs to go to prison.”

The police were called, and though they were sympathetic, there was nothing they could do. The seller hid all of the building code violations behind a “seller’s disclosure alternatives” form – the homeowner bought the house “as is”. Under the condition signed, the seller does not have to disclose anything, and at the time of purchase such violations become the responsibility of the buyer. (For the record, we ALWAYS use a seller’s disclosure form!) The homeowner moved up to the next level of government and began working with a civil investigator on behalf of the county attorney. In his investigation, he discovered that the seller ran the transaction as a 1031-Exchange through the IRS, provided outdated contact info, likely had done this before, and may use offshore bank accounts. The seller was untraceable. 

This poor man’s choices were to:

  1. Abandon the house, forfeit mortgage, and ruin his credit for 8 years
  2. Pray for a disaster that would be covered by insurance
  3. Pay for tens of thousands of dollars for the repairs out of his own pocket

He has been detailing his struggles on this blog, and has been fixing these problems on his own for the past four years.

Why didn’t the home inspectors notice this?

Home inspectors aren’t going to find things behind drywall or concrete. 

Can’t insurance cover repairs?

Homeowner’s insurance covers accidents and disasters, not fault construction or predatory remodeling.

Predatory remodeling is one of the most-abused types of real estate fraud. House flippers many avoid building permits, inspections, and often hide known problems. There are currently no common laws to prevent it in the United States, though there is in much of Europe.

What’s the homeowner’s advice?

“Know what I know now, I would advise: 

  • Never buy a home in a snowy winter. There’s no good way to inspect the roof, yard, and driveway under heavy snow accumulation. 
  • Take lots of pictures during the visit, and compare them to ones you find on Zillow. I didn’t find photos of my property until after the problems started. I thought it was homesteaded… no idea it had been flipped. 
  • Make you realtor sit down with you, look you in the eye, and explain every single thing you are signing.
  • Listen to your gut. If something seems shifty, stop and ask a ton of questions. Demand documentation and reasoning for everything. I knew no permits were pulled, so I never suspected that any remodeling work was done, apart from some minor painting, etc. I had no idea it had been flipped, or that the shoddy work was so extensive.”