Relying on the advertising, the buyer believed the home to be "TOTALLY RE-DONE" as described. He submitted
a purchase offer, had an inspection and closed on the home. One month later, during a period of heavy rain, water dripped from the light fixtures and a black substance began oozing from beneath the baseboard of the kitchen's exterior wall.

A builder called in to look at the damage discovered that the new roof had been incorrectly installed causing water to enter the home. The black substance was mold from decaying wood framing that had been covered up with new drywall and vinyl siding. The new vinyl siding was installed with the wrong fasteners and was falling off in various places. There were only two new windows and one new door, not new windows and doors throughout. The others looked new, but where ten years old.

Investigation revealed that the property had been purchased as a foreclosure for $20,000. The flipper spent approximately $10,000 for materials and professional electrical, plumbing and mechanical services for which permits were approved.

Installation of the leaking new roof, vinyl siding, drywall, kitchen and bath fixtures, appliances, cabinetry, windows and doors were all completed by the flippers. They recruited a Realtor to find a buyer and successfully "flipped" the house for a $40,000 profit.

The "flippers" later admitted they had no knowledge of building construction, and excused themselves of wrongdoing by claiming they didn't know they were doing
a poor job. They concluded that all fault rests with the home inspector who didn't discover the mistakes they had made.

To their credit, they did a "good job" of covering up poor workmanship. Even a building inspector from the City of Lansing indicated that he didn't see anything alarming when he looked it over.

The Resolution
Real estate law dictates that once you've purchased a home or property...it's yours. It can't be returned for a refund, unless fraud is involved. This case is going to court and charges of fraud are being used to seek damages and restore the buyer back to the financial condition he was in before responding to the notorious advertisement.

Our advice
If the home is vacant and appears to have had recent improvements such as flooring, kitchen cabinetry, and freshly painted walls, it may be a home being flipped. Have your Realtor research the property's history. The Realtor will be able to learn if the home had previously been a foreclosure and how much the current owner paid. A call to the local building department will indicate what permits were recently applied for. With luck it may be possible to learn something about the person responsible for the work that was done to the home.

If you decide to purchase the home, ask the listing agent to produce receipts for materials and labor that have been invested in the home. When the home is inspected, be sure to ask the inspector to look for anything that may look like poor or suspicious workmanship.