Episode 31 | Buyer Got Scammed? PropertyLens Reveals Red Flags behind the $14M Tampa Mansion

[00:00:00] Bob Frady:

 Ladies and gentlemen, boys and girls ships at sea. It is time for this week's episode of Property of the Week from PropertyLens. As always, I'm your host, Bob Frady, co-founder and CEO of PropertyLens with me as always, 

[00:00:23] John Siegman:

 John Siegman, president and co-founder of PropertyLens. 

[00:00:26] Bob Frady:

 So John. This week you found something and posted it on LinkedIn.

What did you find? 

[00:00:33] John Siegman:

 I found that I can get 15,000 people to stare at a LinkedIn post. That's what I found. A post was about a very beautiful and very expensive house in Tampa that has a exceptionally large lawsuit associated with it. As the buyer is alleging that the seller and the seller's agent. Did not disclose that they had done Unpermitted work, and the buyer is now spending a couple million dollars to undo all of that unpermitted work, taking the house down in size from 10,000 square feet to about 6,500 square feet.

[00:01:17] Bob Frady:

 How about that? You buy a $14 million house and then you gotta rip out 35% of it and replace it to bring it up to code because it's in a floodway and it wasn't permitted the first time. I think that's lawsuit material.

[00:01:33] John Siegman:

 You know? And the thing is depending upon the price of your house, the higher the price, the bigger the lawsuit.

[00:01:43] Bob Frady:

 So what did you do when you saw this lawsuit, John? 

[00:01:47] John Siegman:

 Well, the first thing I did was the same thing that everybody should do was I went and I ran a PropertyLens report. 

[00:01:55] Bob Frady:

 Oh, say it isn't true. You ran a PropertyLens report. 

[00:02:01] John Siegman:

 I did run a PropertyLens report. 

[00:02:03] Bob Frady:

 What did it show? 

[00:02:04] John Siegman:

 Beautiful house. It's a big house.

You could live there with five other people and never see them. In the summary, it says it's in a flood zone. It's, fairly stable. It's only had 200 in the last 15 years. It's not a flip property. We're estimating repair costs to be $33,000. So $15,000, about a thousand, $1200 bucks a month, which isn't bad given the price of the house.

It's had some significant tax increases because of increase in value. And insurance is actually pretty much at the national average for price increase. So, you're looking at this, it's in a flood zone, it's on the bay. shouldn't be too much of a surprise. 

[00:02:47] Bob Frady:

 So what are some of the good things and bad things about this house, John Sigman?

[00:02:52] John Siegman: 

Well, the bad thing that's screams is property size discrepancy. 

[00:02:57] Bob Frady:

 Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding. And why do we have property size discrepancies? John? 

[00:03:03] John Siegman:

 Because somebody between the county assessor, the realtor and some of our other data sources don't agree on how big the house is.

And sometimes it's just bad measurement. But a lot times it's because there's been unpermitted work. 

[00:03:25] Bob Frady: 

See what people do is they'll expand a house and not pull permits because they don't wanna pay the assessor. The extra taxes, like in California, when you add on to your house, you increase the value of that house and you increase your tax rate.

In other places, it's the same thing. The bigger houses pay more taxes. So people say, I don't wanna pay those taxes so they don't get permits. And there's a discrepancy. So when you go to sell the house, you say it's 10,000 square feet and the assessor's like, hold on a second. Wait a second, let's check our work.

And if it's not permitted, the assessor or the county has the right to say you're not up to code. You gotta rip all that stuff out. That's a bad day when you buy a house or sell a house even to find out, I can't sell this the way it is, or I can't. I shouldn't buy this the way it is. I had this happen personally.

I had a house in Southern California. We've talked about it before. The prior owner had built a bedroom into the garage. I assumed it was permitted, it was not. So I had to rip it out before I could sell the house 'cause it wasn't up to code. That was a bad day. Always when you see a property size dis discrepancy, you gotta ask about that discrepancy.

If you're walking in here, what are some of the questions that you should ask before making an offer? 

[00:04:46] John Siegman:

 Well look at question number one. Are there any unresolved permits or construction issues? 

[00:04:52] Bob Frady:

 Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding. Lawsuit avoided if this question was answered properly or lawsuit confirmed if it truly wasn't answered properly.

But this is a question that you should ask. There's something going on at this house. 

[00:05:08] John Siegman:

 You're thinking about buying this house. It's on the bay. What are you doing about flood? 

[00:05:13] Bob Frady: 

Yep. Water's coming in at some point, as everyone in Tampa knows from the last hurricane, you gotta figure out how you're gonna get rid of it.

Look at that beautiful description. Just like. A match.com profile. It's meant to put the best foot forward, not necessarily to expose the flaws. 

[00:05:31] John Siegman:

 Yes, notice all the pictures. They always look better in pictures. 

[00:05:35] Bob Frady:

 This is a Siegman house right here. 

This is a Siegman house. 

[00:05:38] John Siegman:

 The glass elevator mentioned in the lawsuit.

By the way, was the part of the glass elevator not being permitted? I mean, it's, you got a three story, three tier pool. I mean, where does that happen? Your damaging events, all of the things associated with the roof, and then we get into permits and 

[00:06:01] Bob Frady: 

Hey, look at that. 

[00:06:02] John Siegman:

 Page three of the permits, were starting out with 2007, which gets back into the construction.

But if we fast forward 17, 18 years, you'll notice that there's all of these permits that were recently pulled. 

[00:06:19] Bob Frady: 

September 24th. That's like 15 days ago. 

[00:06:22] John Siegman:

 If you don't have fresh data, what's the point 

[00:06:26] Bob Frady:

 exactly. 

[00:06:27] John Siegman: 

Lots of ideas. Here's all of the things, all of the permits, 'cause we know it was sold in 2023, that've had to be polled to take care of getting the house back into code.

So on top of the 14 million for the house, if you total up these permits, you're looking at a number that's close to $2 million. And I don't care who you are, $2 million. That's noticeable. Yep. 

[00:06:57] Bob Frady: 

And then we see a big gap. 

[00:06:59] John Siegman:

 A big, big gap, a couple year gap. And it's in these couple of years that, the upgrades were done.

According to the lawsuit. So then we have, standard stuff for Florida. If you think about it, you know the house was 10 years old. You start having people come back and recharge air conditioning systems and change things out and stuff like that. And then you get into the permits that were pulled to actually build the house.

So you know who all the people were to doing the work. all of those types of things. You can see it's here. They were constructing a three story masonry, single family dwelling, entry, balcony, lanai, and garage. So lots of different permits issued, and a lot of times the valuation of the permit is just a guess.

They just put a number down there. 

[00:07:57] Bob Frady:

 It usually comes in higher. Doesn't usually come in lower. 

[00:08:00] John Siegman:

 Never comes in lower. It never comes in lower. Take it from two guys who have built their own houses. It never comes in lower. 

[00:08:10] Bob Frady:

 So here's the thing, it's like this is a fantastic house on the surface. Every house, whether it's $14 million or $140,000, can have issues hidden within that house.

If you're buying a house, this guy's a doctor who bought the house. He's not an expert in real estate data. We are the authorities in real estate data and how we can use it to assess a property before you make that offer on the house, as you see. From the report, the number one question. Are there any permit issues with this house and the work that's been done on this house?

If I'm a realtor, especially a buyer's agent, and I don't order this before I let my customer make an offer, I'm committing malpractice. Because even if the report says, Hey, everything looks good, listen, there still might be issues, but at least you've done the deep dive to say, is there something here that's weird that needs to be answered before you put down your money on the house?

Because let me tell you something, the best lawsuit is the one you never have. It's a freaking nightmare, as well as all the work that you have to do if you're a buyer's agent. Get a PropertyLens report before you let that person make an offer on the house and anticipate what some of these issues might be, because nobody wants that experience.

John, what do you think? 

[00:09:44] John Siegman:

 Well, clearly whether you're buying or selling, getting a PropertyLens report is really key. So if you look at something else that I posted about this week, 56,000 listings fell out. August. That's 56,000 deals that didn't close. Can you imagine being in sales and walking into your boss mall?

I didn't close 56,000 deals this month. 

[00:10:13] Bob Frady: 

The worst part is I was at the table. It's not like 56,000 imaginary deals didn't happen. 56,000 paper deals didn't happen. 

[00:10:22] John Siegman:

 These are people who got together, agreed on a price, and then couldn't get the deal done. For numerous reasons. If you as a buyer's agent or as a seller's agent are able to close just 1% of those deals, that's an extra $10 million in commissions.

Because here's the report. Here's the things that should be known. Mr. Seller. Yes. Your house has some weaknesses. Mr. Byer, this house is perfect. Stop nickel and dimming. Buy this house. 

[00:10:58] Bob Frady: 

Yep. It's crazy. that's why we exist. We exist to point stuff like that out, not just on multi-million dollar houses, but on multi-thousand dollar houses, which sometimes have even more work that need to be done associated with them.

It behooves you before you put your earnest money down on a property. Run a PropertyLens report. You can't get all this stuff from free resources, plus it doesn't filter it and tell you what to do. That's where we come in. We do the hard work for you. Listen, if you wanna roll the dice and end up in a lawsuit two years later, good luck.

If you wanna know what to do, come to see PropertyLens and also subscribe. Makes us feel better when you subscribe. So John, anything else you wanna add about this house? 

[00:11:47] John Siegman:

 No, it's beautiful. And when you win the lottery, go place the bid on it. 

[00:11:51] Bob Frady: 

Yeah, it's beautiful. It's we Western facing. It's nice. Tampa's a nice place.

A little hot in the summer, but gosh, it's a nice place even. It looks beautiful. Looks beautiful. But there was an issue. Now there's a giant lawsuit. So, and we're not commenting on the merits of the lawsuit. Not at all. That's not us. That's way past where we are. But we do know that there was an issue that we identified with this property that was pretty easy to spot for us because this is what we do.

And now you can have it. Let's get a PropertyLens report. All right, so for this week's episode of the Beautiful House Property of the Week. With PropertyLens, I'm Bob Frady. 

[00:12:39] John Siegman: 

I'm John Siegman. 

[00:12:42] Bob Frady: 

Till next time, remember, before you buy go Verify with PropertyLens.