Bought Foreclosure - Bank/Agent Failed to Disclose

[imateechur]

What is the name of your state? Texas

About 10 months ago we purchased a home. We paid over $1000 in home inspections, so we thought we were safe. Boy, were we wrong! Please forgive the long post - I want to make sure and include all of the details.

House had new carpet, new paint, and new tile in kitchen. There was a crack in the exterior brick of the house, which prompted us to hire a structural engineer to come out and do an inspection. The engineer recommended a foundation repair on that corner of the house, but otherwise said house was fine. (The listing agent had reports from two foundation repair companies stating that no repair was needed.) We asked the seller (bank) to pay for foundation repair on that corner and they did. All other inspections came back fine. We closed on the house and moved in.

Within the week, we noticed that the carpet in the formal dining room was wet. After plumbers cut into the wall looking for a leak and spent many hours searching for the source of the water, it was suggested that the carpet be pulled up. We discovered a huge crack in the slab. The water was coming from backed up septic tank through the crack in the slab. We paid $1500 for septic tank repairs, but we were concerned that we were not informed of the crack in the slab. Realtor must have known this as he oversaw the installation of new carpet in that room. We began investigating and noticed that there were many cracks in the walls above doors and windows that had been repaired and were not noticeable unless you were specifically looking for them (which a structural engineer should have been trained to do, I would think). Within weeks the new tile in the kitchen and dining room began cracking. I need to mention that these cracks were on the opposite side of the house from the foundation repair. The air conditioner downstairs has gone out once, the upstairs one twice. This winter we tried to build a fire in the chimney and smoked out our house - it is not working. When it rains water leaks in from behind the chimney. We have no water pressure or hot water in the kitchen. We discovered another plumbing leak in the garage a few weeks ago. Needless to say, everything that CAN go wrong HAS.

Now to my question. When we signed the contract we did sign a paper stating that we understood that the seller had never lived in the house and was not aware of any problems. BUT - I am SURE that the listing agent new of the problems because he was in charge of all of the repairs that covered them up. This is why there was new carpet, new paint, and new tile in the kitchen. Had we known about the cracks in the walls and in the slab, we would not have been convinced that the foundation problems were isolated to one corner of the house. (I'm sure that the structural engineer wouldn't have given the house an ok inspection, either.) Now, the cracks that were covered up when we bought the house have reopened, and the tile in the kitchen is cracking as we speak. Do we have any legal recourse? Would it be against the listing agent, the bank, or the inspectors that told me everything was ok? My main concern is the foundation as it is so costly to repair, and it is the one thing that I am sure the listing agent knew about and tried to cover up - or he tried to cover up the extent of the problem. I don't know what to do. HELP! (And if you made it to the end of my post, THANKS for being so patient)

[HomeGuru]

Originally Posted by imateechur

What is the name of your state? Texas

About 10 months ago we purchased a home. We paid over $1000 in home inspections, so we thought we were safe. Boy, were we wrong! Please forgive the long post - I want to make sure and include all of the details.

House had new carpet, new paint, and new tile in kitchen. There was a crack in the exterior brick of the house, which prompted us to hire a structural engineer to come out and do an inspection. The engineer recommended a foundation repair on that corner of the house, but otherwise said house was fine. (The listing agent had reports from two foundation repair companies stating that no repair was needed.) We asked the seller (bank) to pay for foundation repair on that corner and they did. All other inspections came back fine. We closed on the house and moved in.

Within the week, we noticed that the carpet in the formal dining room was wet. After plumbers cut into the wall looking for a leak and spent many hours searching for the source of the water, it was suggested that the carpet be pulled up. We discovered a huge crack in the slab. The water was coming from backed up septic tank through the crack in the slab. We paid $1500 for septic tank repairs, but we were concerned that we were not informed of the crack in the slab. Realtor must have known this as he oversaw the installation of new carpet in that room. We began investigating and noticed that there were many cracks in the walls above doors and windows that had been repaired and were not noticeable unless you were specifically looking for them (which a structural engineer should have been trained to do, I would think). Within weeks the new tile in the kitchen and dining room began cracking. I need to mention that these cracks were on the opposite side of the house from the foundation repair. The air conditioner downstairs has gone out once, the upstairs one twice. This winter we tried to build a fire in the chimney and smoked out our house - it is not working. When it rains water leaks in from behind the chimney. We have no water pressure or hot water in the kitchen. We discovered another plumbing leak in the garage a few weeks ago. Needless to say, everything that CAN go wrong HAS.

Now to my question. When we signed the contract we did sign a paper stating that we understood that the seller had never lived in the house and was not aware of any problems. BUT - I am SURE that the listing agent new of the problems because he was in charge of all of the repairs that covered them up. This is why there was new carpet, new paint, and new tile in the kitchen. Had we known about the cracks in the walls and in the slab, we would not have been convinced that the foundation problems were isolated to one corner of the house. (I'm sure that the structural engineer wouldn't have given the house an ok inspection, either.) Now, the cracks that were covered up when we bought the house have reopened, and the tile in the kitchen is cracking as we speak. Do we have any legal recourse? Would it be against the listing agent, the bank, or the inspectors that told me everything was ok? My main concern is the foundation as it is so costly to repair, and it is the one thing that I am sure the listing agent knew about and tried to cover up - or he tried to cover up the extent of the problem. I don't know what to do. HELP! (And if you made it to the end of my post, THANKS for being so patient)

**A: in one sentence state your issue and your question.

[BradleyS]

You have quite a bit to say**************

Now......

What can you actually prove?? (Contracts, receipts, proposals, etc)

Was the property an REO? (Repo'd)

What did the purchase contract, amendments, and addendums have concerning disclosure????

Additionally, the "listing agent" is NEVER in charge of any repairs to a house that is not owned by the agent. The Owner is always in charge. The agent may have been a liason between the contractor's and the seller....but has no decision making ability without a legal Power of Attorney.

Read your contract and documents carefully, banks are pretty good about covering their "butts."

[HomeGuru]

Where is the writer?

[imateechur]

where I have been! Since posting my first message our upstairs air conditioner went out AND our living room was flooded due to a leak under our concrete slab. (The water is coming in through the crack that I mentioned earlier.) In order for the air conditioner to be fixed they are going to have to cut into the wall - and I'm sure you have heard how expensive repairing a plumbing leak under the slab is. I went back and read the addendum to the contract that I signed, and basically I made a huge mistake. It states that the bank nor the listing agent can be held responsible because neither of them lived on the property and were not aware of problems the house may have had. I KNOW that the listing agent was aware of the crack in the slab as he is the one who oversaw all of the repairs on the house (the bank is out of town). I don't know think I have many options...pay for the repairs or move out and let the bank foreclose. I'm beginning to wonder if that is why the previous owner let the house go in the first place. If only I could turn back time...I would RUN RUN RUN away from this dump.

[John Se]

Did you think that you would get a great deal and beat the system? Assuming you got a great deal, fix the problems and enjoy the house.

[imateechur]

We didn't get a GREAT deal on this house...We paid the same as if it hadn't been a foreclosure. We were in no way trying to "beat the system". We saw a house that we liked in an area that we liked and it just so happened to be a foreclosure. I am fixing the problems - I have to, or else I wouldn't have an air conditioner or running water. It is hard to "just enjoy the house" when you are looking at spending an additional $30,000 on repairs that were hidden from you. The fact is the listing agent KNEW that there was a huge crack in the slab (it runs all the way across the house) and he HID it from us. PERIOD. Had I known about the crack I would not have bought the house. PERIOD.