Warning to Home Buyers

[stormchaser]

Long post, apologies in advance...

Some of you may or may not have noticed that I haven't been posting much for weather updates over the last month or so. This is due in part to the lack of anything worth reporting but also mostly because my free time is now limited.

Long story short, my wife and I purchased a house in the area a couple of months ago (at the beginning of July). This is an old house (130 years old) but the seller flipped it so most everything is new (or fairly new) on the inside. They gutted it down to the studs when flipping it. In addition, they replaced a large retaining wall prior to purchase.

Here is where the scam/my warning comes into play.

The people who flipped the house and then sold it to us didn't get a single permit for all the work they did. NONE OF IT. This includes the retaining wall (over 4 feet so a permit is required), HVAC, all new electrical throughout the entire house, new furnace/AC, plumbing, windows, siding, etc. The only reason I found out is because the ~2-3 month old retaining wall they built was poorly constructed and already started to show signs of failing a couple weeks after we purchased the home.

So now all my time is occupied with sloping our yard (with the retaining wall starting to fail, it now has serious drainage issues), working with contractors to get estimates/bids, etc, submitting a claim through our title insurance company since all this work was un-permitted...and crossing my fingers our home owners insurance doesn't cancel us in the process.

This REALLY |expletive| sucks though. My wife and I both had previous marriages and went through some really tough times/lost homes in the process. We busted our |expletive| and rebuilt our credit, etc over the last 10+ years and FINALLY got into a good financial position to buy a house and then this happens. We didn't do anything wrong. We had a home inspection. We tried to be careful and patient and looked for a new home for over a year before deciding on this one. There was no way for us to know if the work was done without a permit - or at least, why would we ever suspect it wasn't and/or think that a home inspection wouldn't catch something like this (btw, it doesn't)?

The [expletive] home sellers stole that excitement/sense of accomplishment, etc away from us when purchasing a home. Yes I've contacted them. Yes I tried to handle things outside of the legal system in effort to just make things right. Lets just say they did a very good job of trying to make it impossible to contact them (though I managed to still) and they have no intentions of making things right. It's clear they have been doing this same thing for a long time and have gotten away with the scam for probably years. Enough to be able to build a $700,000+ home in Papillion. Most people don't realize you only have a very limited window of opportunity to file a title insurance claim and by the time most people realize what happened, they're SOL and that window has passed.

They also could have killed us/our kids in the process. After realizing none of the work was done with a permit and consequently wasn't inspected and considering how poorly they built the retaining wall, I knew I had to get things inspected ASAP to ensure they were safe - so I started with the HVAC system. Long story short, if we had turned on our furnace, it's fairly likely we would have had carbon monoxide in the house (among other potentially life threatening issues). Yes we have detectors installed in the house, but still.

If the title insurance claim doesn't come through, pretty good chance my Wife and I are going to lose our house as the city will start putting liens, violations, etc against our property and even though the previous sellers did all the unpermitted work, legally it doesn't matter and we'd be responsible. Pretty good chance much of the work will need to be redone and cost well over $100,000 to do so.

Anyhow, sorry for the long post but I probably won't be around to post very much in the coming weeks or months as we TRY to sort through this mess but I at least wanted to put a warning out there for people. Once I'm more comfortable with the situation and not at risk of losing our home insurance, I plan to contact Mike Mcknight and hopefully help get the word out to warn people/DESTROY these assholes. If you buy (or previously purchased) a house that was flipped when you purchased it, make sure they did all the work with permits. If not, you could find out the hard way you're SOL.

[djc311]

Very sorry to hear about this situation! I hope that if you would like to keep the home that you find a way to make it work out for you.

[stormchaser]

Very sorry to hear about this situation! I hope that if you would like to keep the home that you find a way to make it work out for you.

Thanks, hopefully - it's a giant mess right now anyway but hopefully things will get sorted.

[Brad]

Sorry to hear that! That really sucks. Could you go back and fight your home inspector? Did you call Mike McKnight?

[Brad]

Also, for anyone else building a flipped house in Omaha or Papillon, Building Permits are easily accessible 24/7 from your computer.

Google Omaha Building Permits or Papillion Nebraska Building Permits and click on "Search Applications"

You can use the address, but I find it easier to use the Parcel Number:

Omaha Building Permits.jpg

If you don't know your parcel number, you can find it on the Douglas County GIS or Sapry County GIS

PARCEL-ID.jpg

The permits records for this parcel I picked as an example (The old BK on 114th and Dodge) goes back 20 years!

permits.jpg

[stormchaser]

Sorry to hear that! That really sucks. Could you go back and fight your home inspector? Did you call Mike McKnight?

Unfortunately I can't do anything with the home inspector. They have in their disclosures that they don't check on things like building permits, etc. Seems silly but it is what it is. I haven't called Mike yet - currently afraid to go public with all this (aside from here) until I know doing so wont make our situation even worse (i.e. lose my home owners insurance and bring liens violations from the city against us).

[stormchaser]

One thing I should also add that we ran into with this mess. Our local title insurance company (though they're just insurance agents and don't process claims) initially told me that our title insurance ISN'T for things like this when inquiring about making a claim (via their attorney) and that we'd need to hire an attorney ourselves to fight the sellers. This is 100% UNTRUE and in our case anyway, our title insurance policy is SPECIFICALLY for things like this. In other words, they lied to us and thanks to AI, I figured out fairly quickly they had lied with the AI even going as far to say "if the title insurance agent doesn't know that this is what your title insurance policy is for, they probably shouldn't be selling title insurance" (in other words, they knew about it and chose to lie - especially the attorney). Based on research, it isn't uncommon for this to happen as the title insurance agents/attorney have financial interests in what happens and they can significantly cut down on the number of claims being made by telling people this and increase their profitability as a result - because most people would have no idea and just take what they said as the truth. It's sad/disgusting to know that numerous people have probably lost everything in similar situations simply because these scum bags lied to them.

Long story short, fight like heck and trust NOBODY.

[Louie]

AI had some sass on that response. Like it's been asked this before haha.

[stormchaser]

Just an update for anyone curious. The title insurance company denied my claim so I'm going through appeals now. Pretty decent chance I'm going to just be SOL with all this - but fingers crossed.

[almighty_tuna]

That sucks, man. Sorry you're getting the shaft on this.

[nebugeater]

Just an update for anyone curious. The title insurance company denied my claim so I'm going through appeals now. Pretty decent chance I'm going to just be SOL with all this - but fingers crossed.

That sucks beyoned.. Appreciate the update and keep us informed.

[nebugeater]

Do you have a lawyer working for you, if I may ask?

[stormchaser]

Thanks. It definitely sucks - especially knowing that the people doing this are probably going to get away with it yet again. Also sucks that it takes putting yourself at SERIOUS financial risk to really fight and even then, you probably won't walk away with much (if anything at all).

Do you have a lawyer working for you, if I may ask?

Unfortunately no - I called several and the ones I managed to get on the phone anyway wanted $200-$300/hr and at least ~$5,000 retainer to go after the home sellers. I'd probably win as they CLEARLY committed fraud - but even if I win, it would be years before I see anything (IF I see anything at all - since they've changed their business name multiple times, I'm willing to guess they just declare bankruptcy if/when they lose on their LLC, close down and then reopen under a new name doing the exact same scam and avoiding having to pay out anything. Then rinse and repeat.

Considering the retaining wall that they built probably won't make it through the winter without putting some serious money into it or completely replacing it (among other issues), I unfortunately I can't wait that long.

[stormchaser]

Based on how much money they purchased my home for and estimating how much money they probably put into it flipping it, they easily make $50,000+ profit when they do this.

[Linkin5]

I am so sorry this happened, I cannot imagine the level of stress something like this would bring. Are you at a point where you can provide the name of the people that flipped the house? If anything it could be a public service announcement for others to steer clear from their listings.

[stormchaser]

I am so sorry this happened, I cannot imagine the level of stress something like this would bring. Are you at a point where you can provide the name of the people that flipped the house? If anything it could be a public service announcement for others to steer clear from their listings.

Thanks, not yet anyway. Hopefully soon I can though...