Buying Houses That Have Gone to Pot – Bargains?
A new twist to bargain shopping in today’s California real estate market has emerged, as new crack downs on houses owned by pot owners leave tainted “pot homes” on the market. According to the Sacramento Bee, one such home in Elk Grove – a five bedroom, three bath 3800 square foot home in a gated community – is selling for the unbelievable price of $387,000 “as-is” or $437,000 with repairs. As the article states, this stands out even in today’s market.
Why so low? Beyond the neighborhood stigma of owning a home that was once a productive drug farm – pot growers often dramatically change their homes to accomodate their precious plants. Walls are ripped out, electricity is pirated from neighbors, pesticides are used, and temperatures as well as humidity is tightly controlled to ensure bumper crops.
Also according to the Sacramento Bee article:
“From summer 2006 to early 2007, the DEA busted a network of 50 pot homes in the Central Valley, stretching from Sacramento to Modesto. Fifteen of the homes were in Elk Grove, he said. Taylor said 16 people were arrested in connection with the operation, which was linked to a Bay Area crime ring.
Elk Grove police raided another 21 homes last fall. Six of the 15 people arrested in that case are scheduled to go on trial this fall. The rest pleaded no contest and were sentenced.
These two large busts and a number of smaller ones resulted in 40 Elk Grove houses being red-tagged for safety and structural problems since summer of 2006.”
Former owners of these homes can be cited for water damage and violations of state or local building or health codes – but one area that is not controlled by these codes is mold growth. Both pot and mold love warm, moist environments. And there is no way of knowing where or how the former homeowners disposed of their pesticides and fertilizers.
Indoor pot farms are on the rise, as pot farmers can get in three to four crops a year by growing indoors. And they are happening in upscale communities, in large homes such as the one mentioned in Elk Grove.
What does this mean for the typical home buyer? If a home is on the market at a price that is too good to be true – look for signs of its former life. Are there walls knocked out, unusual lighting in place, meters obsured to hide excessive power usage? These are all tell-tale signs that your bargain has a sordid past. By law, realtors are required to disclose if a home was once used as an indoor pot farm. But the web is full of stories about rookie realtors missing the signs, and selling such homes to unwary buyers.
