Hi KK,

As with the other responders DOCUMENT EVERYTHING!!!!!!!!!! Get a printout from the electric company showing that there was no power on at the house for months making the statement that there was 4 tenants living in there an impossibility. Most cities and towns in MA are now requiring perc tests OR are only issuing conditional passes on homes that have not been occupied for more than 90 days, hence the statement of the tenants. With proper documentation to back you (electric company printout, statement from the examiner who did the Title 5 Inspection, a copy of the letter he sent the BOH) if you run into a problem with the system you may have legal legs to stand on later on. I would strongly advise a good real estate attorney!!! My concern for you is: in a legal standing if you KNEW the information PRIOR to purchase and KNEW that there MAY be a problem (as the system could be fine) and you decide to purchase, is there any legal recourse? Your discovery was you exercising your own due diligence and your closing on the property was your acceptance of the discoveries. I would again advise seeking competent counsel as I am not an attorney but maybe some verbage in the form of an addendum could be agreed to prior to the close, but since this is a bank owned I wouldn't put a lot of faith into that.

You are taking a risk if you purchase this and your decision needs to be: Is this home worth the risk? But I would certainly bring your concerns to the State Licensing Department and the Board of Realtors because if this agent did as you say it is entirely un-ethical and may be considered even worse than that.

Best of Luck!

Bobbie Files
"Your Bristol and Plymouth County REALTOR"

First, keep in mind that real-estate negotiations are like playing chicken: the first one to flinch loses. Right now, you're in danger of allowing your emotions to control the outcome of this deal. You don't want to do that. Whether or not this property has the perfect house, in the best neighborhood, with the best schools, none of that would matter if you were to buy a money pit that you can't afford 3-5 years from now. So, remove your emotions from the picture, and re-examine this deal. Does this deal still make sense?

Second, forget trying to hold that realtor more accountable, and forget trying to force the bank's inspector to change his results. Both of those acts are a form of chasing bunny-trails. Instead, you need to focus on activities that will return your the most value, like: ordering (and paying for) a buyer's inspection and appraisal, ordering (and paying for) an inspection for the septic tank, renegotiating your terms, looking at other properties, etc.

Afterwards, you may use your findings to help justify why you want to further reduce your buyer's price.

You are correct in the 20/20 hindsight that a buyer broker would have assisted in looking out for your best interests as teh selling agents job is to list and sell the property on the banks behalf. As far as statements of past renters/squatters and owners, unless you can proof he is offering up information deliberately false and not a guess or estimate. You should have had a seperate septic inspection paid for by you on your behalf that you would have control over which could and should have been given to the title 5 inspector. You will need to have a real estate attorney review your documents and gove you an oppinion.Good luck with working things out

Seems like you have gotten great advice so far ... If anything it should be a lesson for everyone reading about the importance of hiring yourself an exclusive buyers agent. It's key in all types of real estate transactions to have someone that is only looking out for your best interests as a buyer in the transaction. I know you are trying to save money and do the right thing by your family but purchasing a piece of real estate is a large financial (and liability) commitment so while it might be an extra cost to get an attorney involved it will probably be money very well spent for the future.

Good luck with this home. I hope it does not continue to cause grief and stress and instead becomes a fabulous investment where you can raise your family.

Thank you all for the advice! The problem that we have now is the Titile 5 stands as a pass. After we brought it to the title 5 inspector's atttention that there was false information in his report, he wrote to the BOH stating some of the changes that needed to be made in the report. However, those changes aren't even attached to the original document. The title 5 inspector told us it should be a conditional pass and some of the seller's $ should be held in escrow for 6 months. The realtor, who is a broker not a Realtor, said the bank absolutely will not do that. But who knows if he is being truthful. It seems that there is a conflict of interest when the realtor hires the title 5 inspector. Obviously the realtor wants it to pass and there is no one else that oversees the inspection. If we push the issue with the title 5 and get it to be anything but a pass, we lose our financing with the bank and we really want the house. We may find comparable houses at comparable prices but don't feel as we will be able to find one in a comparable neighborhood in a comparable community. Too, we may find out that the system is fine. It may function properly for years to come. We just don't know. Under the circumstances we do not have much faith in the first title 5 inspection. We tried to contact the seller (bank) directly and had no luck. They are located in CA and there is no contact information for them other than through the realtor. We contacted the lawyer the bank (seller) has hired to be at the closing but he said he was only hired for the closing and couldn't do anything. Because of all the controversy surrounding the title 5 our bank is requiring us to get a letter from the BOH stating the system is a pass. They are willing to write that letter but are requiring us to have the system tested again in 6 months at our expense and at that point if there are issues or it is failing we will need to do all the necessary repairs and as you know that is very pricey. We did try to contact a realestate attourney that came highly recommended. We left messages but they were never returned. Unfortunatley, time is of the esssence here. There is a reason we are purchasing a forclosed home. Same as for many, money is tight. We do not have extra funds to be hiring attourneys and battling this out in court. Besides that could take years. We have 3 children 5 yrs and 2 @ 2 yrs. We are trying to get them into a house with a yard and in a good community with a good school system. We can't wait years. Given the circumstances, the seller has offered us $7500 credit for closing which as you know will not cover the cost of a new septic but it most certainly will help. Of course part of me asks why they are so willing to offer us that $. Anyway, it just seems as though there should be some way that the realtor should be held accountable for the mess he has created without it costing us a fortune. Thanks again!

I hope haven't already waived all of your contingencies at this point. Besides pursuing your legal options, (if you have any inspection or appraisal related contingencies) you could order another title 5 inspection and later demand the price to be further discounted (for the amount of that second title 5 inspection)--before you sign anything to waive the rest of your contingencies. This way you'd be able to get back your earnest money.

However, if you've already waived all of your contingencies, then you always have the option to either not close or renegotiate your terms with that bank. Yet, you'll lose your earnest money. Also, be sure to inform the REO manager handling that property of that listing agent's shady behavior, and be able to back up your claims with proof in writing. This is one way you may leverage that shady realtor's behavior against him. In either case, (if you can demonstrate that realtor acted in bad faith) your actions might lead that REO manager to list other properties with another realtor, and you will have killed 2 birds with 1 stone.

I just want to add & emphasize a couple things...
-document, document, document...not only your notes, but do as much communication as possible with email, and if you must have a phone conversation, do it on speakerphone and make sure someone (preferably uninvolved - like at work) overhears it so they can testify, should it become necessary.
-play devils advocate...every liar has the same defense - either you misunderstood or they did; so clarify and confirm everything multiple times.
-even without representation (which I know you have learned you should have - by the way, spread the word, people on this site and lots of other places seem to think that real estate agents are just trying to make money when they emphasize the need for a buyers agent, and a good one - it truly is critical) you have the right to expect any real estate agent to be honest with you. They are required to be honest with you. It is a licensing issue. Contact the state agency that issues the license. Also, if the person is a REALTOR (not every agent is), then you can contact the local/state REALTOR association and file a complaint.

I am sorry this has happened to you. Do seek competent legal advice. Continue to come to this forum for assistance, we'll help if we can.

This late in the process there may not be too much that you can do quickly and easily. Hopefully along the way you've taken VERY detailed notes as well as records of conversations (times, dates & who with), you should absolutely take all your documentation to a qualified real estate attorney familiar with Title 5 issues. You'll probably need to determine if the statements the inspector are written that the agent falsely gave, proof that there is an inadequacy or failing private sewerage system and details from the city/town engineer, board of health etc. You should also notify your lender of these issues this will be of great concern to them, lending on a potentially problematic sewerage system.

You'll also have to have your contract to purchase reviewed. Many of these types of contracts are drawn up by the bank with no changes allowed, and guess what, they're written totally in the banks favor. Many are sold in "as is, where is" condition and they expressly state they make NO warranties on the property. Sometimes there is also language that your deposit money could be forefit if you withdraw from the purchase. This is why you'll need an attorney to review your options. Also you might want a second opinion on the Title 5 examination to see if indeed there is a failed or failing system.

As for the agent, have you contacted their broker of record (broker responsible for the office) to address these issues? They may be willing to work with you due to the large potential for expensive litigation with either a consumer protection action or Title 5 problem. Failing that you could move up the stream to the franchise management if any, or state licencing board, better business bureau and attorney generals office. How you proceed will best be answered by an attorney at this point, time is important, you need to get alot of info to an attorney in a timely fashion to find out what exactly are your options, and they have to be done carefully to protect your rights.

This is unfortunatly one of the problems with bank owned properties and lack of representation by a buyers agent and/or real estate attorney.

I wish you luck in your endeavors, it'd be interesting to find out how you make out.

Best Wishes

Scott Nelson - Realtor
Prudential Prime Properties
Wolfson Cutler Real Estate