Expert: Connie Wildasinn-Broker,GRI,Realtor® - 3/12/2010

Question
We closed on our house back in January.  The sellers never disclosed that there was a large crack in the wall of the basement - which had been patched 3 or 4 times, and carefully covered up and hidden when they sold us the house.  The inspector didn't find it and they never disclosed it.  They also did disclose that the master bath had leaked but they had a professional fix the problem and had no problems since.  Well, the shower in that bathroom is leaking very badly into our garage, and when our contractors tried to look into the problem, they found that that area is completely sealed up by undisturbed drywall, meaning that it has never been touched or serviced by anyone, and there is no other way to get in there.

Also, water began leaking into the basement where they "patched" this large, undisclosed crack in the basement wall.  We have had to pay someone to come out and seal that so we could move forward on the basement and avoid water damage.  

We bought the house from these people, who were being relocated, so when we contacted our realtor, who contacted their realtor, we were told that the relo company informed them that we had bought the house "as is" and they had no obligations.  We have also tried to contact the sellers to get reimbursed, but our realtor told us that she is having trouble getting the forwarding address.  

We can take them to small claims court and get most of our money back, but what are the chances that they will actually pay?  Does small claims court take care of that, or do we have to hire a collection agency if we win that?  Also, we're thinking of hiring an attorney, but are leary of getting too far in over our heads with lawer bills, etc.  Also, if the relo company does end up having to take care of this on behalf of the sellers, I am thinking they will throw their high-powered attorneys at us without blinking an eye and we will end up with a lot of bills on our hands.

Do you have any advice for me?  This is so stressful and it makes me so mad that they did not disclose the water problem in the basement and that they lied about the plumbing in the bathroom.  Please help, any advice would be greatly appreciated!  Thank you!

Answer
Hi Diane...

Oh I dislike the 'A' word... you mentioned small claims.. if you go the attorney route, they will be the only ones getting any money out of it.. You don't mention the state you are from, but you bought 'AS IS' and some states mean exactly that... very gun slinger days.. others not so much...

You had an inspection of the property ...no one found the crack (a big one)in the basement or a leak? no recent paint, or patch on the walls or ceilings? ... so was it not leaking at the time you bought? Leaks can spring up over night .. nothing says it has been leaking for more than the time you have owned the property.. Wouldn't you have seen evidence of a leak during the inspection, if the shower leak is that bad?

You are right to think the REO company will try and stop you in your tracks, not so much stop you as play the wait game, and tire you out... could take a couple years and no guarantee... the goal is to cut your losses and enjoy your home... And there is a certain level of responsibility on your part when you purchase something of this caliber... if you felt the sellers were not being straight you, you had the right (I assume) to have what ever inspections you wanted... if not then hopefully you got a price that accounted for that...

The basement from what I see is the big issue... and you don't mention how much to remedy that... keep in mind the courts (at least here in SoCal) will only make you whole, and that is after a whole lot of lawyer bills.. no one wins.. no one... you may ask for $5,000, get $5,000 and still have attorney fees.. and if you loose, you pay 'Their' attorney fees! Again, only the 'A's' win in this arena!

Good luck with your situation.. love to hear back on the outcome...