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Permalink Reply by Jeff Payne on July 8, 2011 at 7:21am

How much is the meth clean up?  I would think that at the right price a buyer would not be concerned about it and the meth cleanup most likely will just mean the property is worth less than one that does not need to be cleaned up.  I would not count on a lender who does not own the property to clean it up.

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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 10, 2011 at 3:41am

Both Jeff and Betty have great points.

 

1) Can the property be sold at all without cleanup? I would check with the appropriate agency or your State Association of Realtors legal.  

 

2) As Jeff said, what's the cost of clean-up?  I suspect if you find that out, create an Addendum reducing the price by the amount of the cleanup plus an inconvenience factor, the bank may accept it just to get rid of it.  The bank will eventually have to deal with the cleanup so if you / new owner can handle it that's one they don't have to worry about.

 

3) Can the Buyer actually get a Loan while it's still contaminated?  If not, send that lender denial letter along with everything else to the BofA / BONY.

 

4) if all else fails, report the property to the local agency who handles these matters and have them notify BofA / BONY that it needs to be remediated.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

 

 

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Permalink Reply by Travis Davies on July 10, 2011 at 3:51am

Thanks to everyone for the great points. I have a feeling the current buyers are going to bail. Even though it is .1 over the state allowed limit of 1.0, which is really low compared to other states, Just the word "Meth" sounds worse than an atomic bomb to most consumers.

 

I will be calling our UAR Attorneys, State Health, BONY and BOA on Monday. I know that if i was an investor and was in this position I wouldnt want to touch this with a 10' pole and would pay to make it go away. 

 

I'm going to have to get a detailed test done to find out what area its concentrated in to accurately get a clean up bid. Who is supposed to pay for that? I certainly dont want to if the bank is just going to f/c anyway. 

 

My hope is that BOA/BONY will order an estimate then either pay to clean it up or what i suspect is, to reduce the price of the home to offset the clean up. I just had to deal with this on the buying side of a Freddie Mac foreclosure a couple of months ago and thats what they did. Not sure if being an REO or SS makes that big of a difference. I would have to think the additional lost money to f/c then being forced to clean it up or market it as not only an REO, but an REO with meth, would make them want to make this go away ASAP!

 

I'll let everyone know what happens over the next few days. Today is my birthday so I'm taking it off and try not to work for once hahaha...

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Permalink Reply by Jackie Kumm on July 10, 2011 at 5:03am

I have had a simular issue with a property that is now in the new flood plain.  I got no where with GMAC since it was Freddie Insured and then they relisted it as a REO and did not disclose upfront.  I did do a shortsale with BOA and had a meth issue as well, they wanted us to retest using their service company and in the end the buyer walked.

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