Normally with foreclosures there is no way for the bank, the owner, to really know the home condition, and the Realtor is not allowed to make statements about the condition.Basically, you are buying the home as-is and SHOULD GET THE HOME INSPECTED. If there was water damage they are not liable, but you could have mold. In Texas it runs about 10 cents per square foot but I'm sure its much more expensive in California.
Broker - Owner
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Have a good inspector look at the property. Good luck!
Because of this it is very important to do an inspection with a licensed professional to find as much as possible about the home's condition.
I would also suggest working with a real estate attorney and Realtor to help guide you through any potential pitfalls.
Make sure you educate yourself very well on foreclosures. They are not for the faint of heart.