Have you ever come across the term “red tagged” while browsing property listings? This term conjures ideas of sale tags in clothing stores, but the reality is quite different.
What is a red-tagged house?
A “red tag” is a term that signifies that the house is not safe or currently deemed unfit for habitation by the local or state authorities. The “red” in the name is actually a warning. A red-tagged house has a major issue–such as a structural problem, code violation, or safety hazard–that must be addressed before anyone can live in it safely.
Why would a house be red-tagged?
Some of the specific issues that cause a house to be red-tagged include:
- Structural issues: There is a significant issue with the foundation, wall, frame, or another structural element that has caused the fabric of the house to become unstable and thus unsafe. This is usually due to a natural disaster, but can also be age or poor construction.
- Unpermitted work: If significant alterations have been made to the home without the necessary permits and inspections, the home can be red-tagged if those alterations are not up to code.
- Code violations: Building codes ensure safety and livability. If a home has code violations that are not corrected, the home will be red-tagged.
- Dangerous conditions: Toxic mold, lead-based paint, and asbestos are all things that can lead the home to be red-tagged due to dangerous conditions.
How does a house get red-tagged in the first place?
A house will usually be red-tagged when:
- There is a fault discovered in a routine inspection. This might be an inspection following building work on the home, or after a concerning fault is found in a home inspection during the sales process.
- The authorities are alerted to concerns by neighbors or other professionals.
- After a disaster, such as a fire, flood, or tree falling on the home.
Homes are rarely immediately red-tagged upon discovery of a fault – unless there is a serious risk to immediate safety, the homeowner will usually get warnings and the opportunity to rectify the situation. It’s important to remember that a red tag is not a punishment – it’s designed to protect people from harm.
Can you sell a red-tagged house in Massachusetts?
So let’s get back to the question you came here for: can you sell a red-tagged house? The short answer is yes, but it’s not straightforward.
A red tag means a house is unlivable and likely needs extensive and expensive work to get back into livable condition, so anyone looking for a home to move into is going to turn their back on it. Buyers are going to be those looking for a project and are experienced professionals. Remember, even casual investors that like to flip properties may be intimidated if the damage is substantial.
The buyer of a red-tagged home is someone with a trained eye and a good knowledge of what it takes to get a property into good condition from an unlivable one. That means they’re either a contractor or a professional house buyer.
The buyer will also almost certainly be a cash buyer since mortgage companies aren’t going to be interested in taking a risk. If the buyer does need financing, they’ll usually look for an alternative source.
All this is to say that your pool of buyers is small. The good news is that while the pool may be small, there will be someone willing to buy your home in Massachusetts.
What am I legally required to do when selling a red-tagged house in Massachusetts?
As with any house sale, you are obligated to certain disclosures, depending on the state you are in. In Massachusetts, you are obligated to tell potential buyers about any defects you know about, especially those that could affect the property’s value. This is not something to take lightly – lying or trying to pull the wool over a buyer’s eyes is unlikely to work and can end with you getting sued.
If your home has been red-tagged, you are legally obligated to tell buyers that this is the case (and advertise it as such). But that’s it – you are simply required to tell them that it has been red-tagged and what you know or suspect to be wrong with the property.
Who would be interested in buying a red-tagged house?
As we touched on earlier, everyday people are not going to be interested in buying a red-tagged house. Fortunately, professional investors often will be, especially in a state where, in general, properties retain their value well (such as Massachusetts).
If the damage is relatively (for a red-tagged house) minor – such as a tree that’s fallen on the home, damaging the roof, you may attract amateur investors and house flippers who flip homes as well as those who flip houses to make their living.
If the damage is more substantial than that, or potentially dangerous to deal with, the home will only appeal to professionals who seriously know what they’re doing.
How do I sell a red-tagged house?
Selling a red-tagged house in Massachusetts requires a bit more than simply listing it on the market. Here’s a general guide to the steps you should take:
- Understand why the home was red tagged: Obtain any copies of the reports or citations that caused the red tag. This will help you and a buyer understand what needs to be done to fix the home.
- Find a professional to help: Find a professional to help you sell the red-tagged home. This should be a realtor, auction house professional, or someone else with significant experience selling red-tagged homes.
- Full disclosure: Make sure you fully disclose everything you know about the property and its problems. You don’t need to know absolutely everything about what’s wrong with it and what it needs to be put right, but you should be forthcoming about everything you do know.
- Look for opportunities to market to the right people: If you’ve enlisted the help of a professional in step 2, they should handle this for you. But do keep in mind where professionals are looking for opportunities to buy homes like yours and try to get your property in front of them.
- Be patient: It may take longer to sell a red-tagged home than a home that’s inhabitable, and be realistic about the offers you’ll get (and what you should or shouldn’t accept). Again, a professional can help you here as they can explain how this works. We explain how we calculate the offers we put on homes here, on our How It Works page, which will give you a good overview of the process.
We’ll Make an Offer on Your Red Tagged Property
Selling a red-tagged property can be challenging, but it doesn’t mean you’re stuck. We specialize in buying homes in Massachusetts in any condition, including those with red tags. We understand the complexities of these properties and can almost certainly make an offer on your red-tagged home. Don’t let the red tag deter you from exploring your options. If you’re considering selling, we’re here to help. To learn more about our process or to get a no-obligation offer for your home, click here.