If you’ve viewed homes for sale in the city of Warren lately you’ve probably come across some that have this notice taped to the window or the door:
When I’m out and about showing homes to buyers I’m seeing more of them on vacant homes. (Most of the vacant homes have been foreclosures or bank owned homes.)
If you wish to buy a home that has been tagged by the city building inspector as needing a certificate of occupancy there are a couple of things you should know before you make an offer to purchase:
You will need to contact the city inspector and make arrangements for the home to be inspected. Items that the inspector deems need to be fixed, repaired and/or replaced will have to be done before you can legally occupy the home.
Also, an appraiser hired by your mortgage lender will certainly take a photo of the notice on the door or window and include that in their report. They may also include verbiage such as “Needs to be inspected by the City of Warren prior to occupancy”.
Important: Talk to your mortgage lender before writing an offer on a home that needs a certificate of occupancy. Your mortgage lender (and the underwriter) may require you to have the items fixed that the building inspector cites that are necessary for the occupancy certificate before you can close on your home loan. If that’s the case, then you’ll want to seriously think about whether you want to spend money on a home that isn’t yours yet.
Most banks and asset managers of the foreclosures that I come across will not make repairs to a home for you to purchase it. It truly is an ” As-Is” purchase.
For the investor that is familiar with these types of things purchasing a foreclosure that has been tagged can be a good investment. For the average first time home buyer there are pitfalls that you need to be aware of so that you can make an educated decision about whether to proceed with the purchase or to move on to another home that hasn’t been cited for inspection.
~Kris Wales~ A partner for your real estate needs in Macomb County MI
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4 responses so far ↓
1 Mike Nichols // Jan 4, 2010 at 8:11 pm
Why must tagged homes that are new owner occupied, be brought up to 2006 ordinances and others are not ?
2 Kris Wales // Jan 5, 2010 at 7:12 am
That would be a question for the city officials to explain in detail I’m afraid.
My “guess”?: Many of the foreclosed upon homes have been vacant for quite a bit of time before they are actually put on the market. Without a homeowner there to keep the utilities on, and provide basic maintenance, some if not most of the homes have fallen into severe disrepair. The city inspectors want to make sure that health and safety issues are taken care of before issuing a certificate of occupancy.
3 Joe918 // Jun 15, 2010 at 4:39 pm
I am the buyer of such a tagged foreclosure! I made an offer on May 05 for a house in Roseville, and my offer was accepted on next day. I paid a $1000 deposit and had a closing on May 25. At the closing, my agent gave me a notice from the City of Roseville that says no certificate of occupancy will be issued to the house I just bought. The city inspectors did an inspection on May 10 and described a whole bunch of violations, including cleaning the airducts. But, it was too late for me to walk away! This was an “as-is” sale. Can I go back to the agent or what? Too many repairs! Too many permits!
4 Kris Wales // Jun 16, 2010 at 2:27 pm
Hi Joe,
I’m so sorry this happened to you. Yes, most documents that you signed while purchasing a foreclosure are “as is” documents. It sounds like what happened in this instance is the city tagged it after your offer and before closing. If no one went by the home during the process it would be hard to know that the city tagged it.
As always, you have the right to consult with an attorney to see if anything can be done. Most first consulations are free.
I do hope though that you can get city required repairs done and move in to your new home soon.
Kris
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