Never make decisions based on seller representations!

I just wanted to share an experience I had over this past weekend. It relates to a situation many new investors, and traditional buyers will face when purchasing a property.

Never rely on the information a seller provides.

Let me repeat that, never make decisions based on any information the seller provides. Verify it all yourself.

I get FSBO, and handyman special type property leads in my email every morning from craigslist. Every morning I evaluate these properties as potential purchases for myself, and if they do not meet my criteria, I still evaluate them because they may be a fit for another investor.

The particular property I will talk about today is a single family house in Fairfax Virginia. It is listed FSBO at an asking price of a little over 600k. At first glance, it looks like a deal because there are recently sold comparable properties within a mile at over the 700k range. Wow! But wait, don't get too excited my brain tells me.

My first step in evaluating any property is to head over to the tax records so that I can compare the info there, to what the owner is listing. Low and behold, I see that the tax records show the house at a little over 1200 sqft, but the owner has it listed at 2700 sqft.

Up until that point, I had been having a text conversation with the owner, and when I brought up the discrepancy the owner went silent for a few hours. Then replied, the work had been done by the original owner. I said "Hey that's ok! I'm just going to verify with the permitting office that the work was indeed permitted" The owner again went silent.

I was able to check through the permitting office that the work was not permitted. 

The laws vary from region to region, but if you do not catch something like this, it's possible for you to be on the hook for the cost of the permits, and a bringing the property up to current codes.

Needless to say, the owners have been silent since I informed them of the situation, and have dropped the price listed on their craigslist ad.

I hope this helps someone avoid a costly situation. Share your thoughts in the comment section :)