My grandmother recently bought a new home in my hometown (Chicago), and it has been nothing but a disaster. It’s in a bad neighborhood, but worse than that, things are dangerous inside the house! According to my parents, the place has exposed wiring, problems with some plumbing fixtures, and possibly even foundation issues. I’m concerned that the seller took advantage of my grandma. Does she have any way out of this?
It is a shame that your grandma did not end up with the house she wanted. While the real estate industry is thriving–5.5 million existing homes were sold last year, the highest such number in a decade–it is always important to remember that buying a home is a big commitment, and that it is vital to do all the research you can before committing. Even when shopping in a town you know, it pays to work with real estate agents that know the area. Some of Chicago’s award-winning real estate experts make neighborhoods a key part of how they organize real estate listings. That makes sense, because location is key in real estate. The median price for a one-bedroom apartment in Manhattan is $2,090, but the same apartment would cost only $680 in Detroit.
Location is key, but, as your grandmother well knows, it is not everything. The structure and systems of the property itself must be carefully examined, which is why home inspections are typical (though not legally required) in real estate deals. Problems with an electrical or plumbing system can be very dangerous, and electrical contractors say that homeowners do not always realize just how many things can put a home in danger–even rodents can cause electrical issues by chewing on wires.
The unfortunate truth, however, is that even when proper precautions are taken, some shady sellers can get the better of trusting home buyers. It is not clear from your question whether or not your grandmother knew about the home’s problems before she bought it, but if she did not and the original owners did, then she may have a legal recourse. Most states have seller disclosure laws that would protect a buyer who purchased a home from someone who hid a key problem. In cases like this, however, the burden of proof lies with the purchaser, so your grandmother would have to prove that the house had prior problems, that the former owners knew, and that she herself did not. Only a lawyer can give your grandmother legal advice that is specific to her situation.
Your grandmother is in a tough spot, but there is hope that she can recoup some of her losses through legal means. If you and your parents are concerned about her decision-making, be sure to monitor this situation going forward. With your help and the help of legal and real estate experts, your grandmother might find a good way out of this.
“The real beauty of a house is always the happiness inside that house!” — Mehmet Murat ildan
John Regan is a former Director of Sales for equity research.