Beware Of Sleazy Sales Practices In Marketing Bank-Owned Foreclosures Tainted With Chinese Drywall

In Williamsburg, Virginia, The Virginian-Pilot reports:

• At $207,000, the five-bedroom, 2,700-square-foot home in Williamsburg sounds like a phenomenal deal, even in this housing market. “Yes the price is correct!” reads the real estate listing in a local online database of homes for sale. “What an opportunity. Property to convey 'as is, where is.’”

• But not even the fine print lets potential homebuyers know why this property – which sold for $383,000 in 2006 – is such a bargain. It’s one of several houses containing tainted Chinese-made drywall that have been popping up on the market recently. At least a half-dozen such homes were listed for sale on Friday. Although some disclose to the public the presence of the drywall, other listings disclose that information only to other real estate agents.

***

• Bill and Deborah Morgan lost the home at 8495 Ashington Way in Williamsburg to foreclosure after leaving the house amid health concerns. The property is now owned by mortgage giant Freddie Mac, which hired Prudential Towne Realty to sell it at a deep discount. The description seen by the public on the house only hints at the work that is needed on the property.

***

• Two other listed homes also offered potential buyers no hints that there was anything wrong with the properties. [...] Tanya Cosmini , the home’s agent with Abbitt Realty Co., said part of the problem is that there are no rules on how to disclose the tainted drywall.(1)

For more, see Buyer beware: This home contains Chinese-made drywall.

(1) If the (clueless???) real estate agent really said this, it should be pointed out to her that they same rules that apply to disclosing any fact that can can materially affect the value of property being offered for sale apply to the disclosure of tainted drywall. The fact that the home's deeply-discounted asking price may already reflect that there is something wrong with the home doesn't relieve the agent's disclosure obligation. For her sake, I hope she was misquoted.