DEAR BARRY: I purchased a foreclosed home from a bank about four months ago. Since moving in, I’ve found many defects that were never disclosed. For example, the foundation has settlement cracks; the basement becomes flooded during wet weather; some of the upstairs walls look wavy; and some of the electrical switches have no apparent function. No one disclosed any of these problems when I was in escrow — not the bank, not my real estate agent. Who can I hold responsible for repairing this mess? –Nita

DEAR NITA: When you buy a foreclosed home, the sale is strictly "as is." Foreclosed properties are owned by banks or mortgage companies. The people at those institutions never see the houses they are selling. They have no idea what might be wrong with these homes. To them, each property is just an address in a long list of other foreclosed addresses. Each one is a faceless financial liability to be removed, as soon as possible, from the corporate books.

Real estate agents also have little knowledge of the defects in these properties. They know a little more than the people at the bank because they get a firsthand look, but they lack the expertise needed to evaluate property defects. A good agent, however, will arrange for buyers to hire a qualified home inspector. Agents who fail to recommend home inspections to their buyers subject themselves to high levels of financial liability. If you did not hire a home inspector, either you or your agent made a grave error.

People who buy foreclosed homes often forgo a home inspection, simply because they cannot ask the seller to pay for repairs. This is a faulty decision because the primary purpose of a home inspection is not to assemble a repair list for the seller. It is to gain a comprehensive knowledge of the property you are buying. If you have not already had a home inspection, now is the time to find a reputable inspector.

DEAR BARRY: We listed our house for sale and filled out the disclosure forms provided by our agent. We received a purchase offer and the buyers hired a home inspector, but the sale did not go through. Since then, we have repaired every defect that was listed in the inspection report. Now that these problems are repaired, do we have to disclose the inspection report to future buyers? –Maurie

DEAR MAURIE: Your obligation is to disclose every condition that could be of concern to buyers. If the former defects have been repaired, disclosure may no longer be required. However, we live in a litigious society where people and their attorneys make tidal waves in a rain puddle. To avoid getting wet, it is advisable to err on the side of caution. So let’s consider the following approach:

Ask the home inspector to reinspect the items that were repaired. He can then write an addendum to the original inspection report, indicating that those defects have been corrected. Then you can give the report and the addendum to buyers. This will surpass the disclosure performance of most sellers and will help to solidify the next deal on your home.

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