Can You Sell a Red-Tagged House?

can you sell a red tagged house

Selling a house that is not in optimal condition can be difficult because buyers like move-in ready. So what happens if your house is in such poor shape that it has been red-tagged? 

Would any sane person buy a house that is not in liveable condition because the furnace is unsafe, or there is no running water? On top of that are you even allowed to sell your house if it has been deemed unsafe to live in and code enforcement has given a red tag?

Selling A Red Tagged House: Key Takeaways

selling a red tagged house key takeaways
  • A red-tagged property has a negative connotation to many.
  • It means that the house has significant problems, which makes it non-livable.
  • Most buyers will not purchase a tagged house because of all the trouble it entails.
  • Selling a red tagged property has a much smaller buyer pool because a bank will not give the buyer a mortgage.
  • You can sell your house with a red tag but you will need to find a cash buyer that is willing to buy your house as-is. 

Let's Get Your Red Tag Home SOLD!

Today I will cover all the information so you can get your red-tag house sold. Once you have read this practical “How To” guide you will be able to take the next step in getting rid of your problem property. 

Shall we get started?

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Table of Contents

What is a Red-Tagged House?

Red-tagging a house occurs when the house, whether part or whole, is unsafe. This makes the house unlivable since it can pose risks of injury and other dangers to the occupants. Sometimes, the locality will red-tag the entire house if called for. But, there are also cases when only a portion of the house causes great concern.

There are some cases where the damage is easily repaired. However, sometimes it requires demolition and rebuilding to ensure that safety standards are met. The necessary repairs and renovation depend on why the house was tagged in the first place. It also depends on the extent of the damage and how people can safely live in it afterward.

houses under flood

Can You Sell a Red-Tagged House?

This is a common question among property owners who have a red tag label on their property. The answer is yes. But, selling a red-tagged property comes with many challenges, from finding the right buyer to looking for a financing institution willing to finance the property.

Who will buy my house red-tagged house? “I NEED TO SELL AS-IS AND I MUST SELL MY HOME FAST.

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Why is a House Red-Tagged?

There are several reasons why a particular house is red-tagged. Sometimes, these reasons are beyond the control of homeowners.

Natural Causes

When nature takes its course, no one and nothing can stand in its way. The damages brought by natural phenomena can damage the structural and internal properties of the house. Thus, it becomes unsafe for occupants. Examples of natural causes that may lead to a house being red-tagged are:

  • Tornado
  • Hurricane
  • Flooding
  • Earthquake
  • Thunderstorm
  • Sinkhole

Accidents

Accidents can make a house unsafe for occupancy. Accidents like fire, vehicles running into the home, or even an airplane falling into the house are reasons for red-tagging a property. The house will have the red-tagged label until the damage is repaired so that it becomes safe again.

Building Permit Issues

A building without proper permits is a ground for red-tagging. This normally happens when you make improvements and modifications to the house without valid permits. When making alterations, seek approvals and pay fees to the local building jurisdiction. It can be a workload considering that some changes require several permits.

A building inspector will give corrections or approval of the construction. After the changes are made, the same inspector gives the final approval so that you can get a certificate of occupancy. Should there be a problem, you need to fix the issue stated or pay any fees/penalties you haven’t done yet.

Electrically Unsafe

Unsafe installations, wirings, and panels can be reasons for red-tagging a property. The electrical company can shut off its service to your house because of a problematic meter, panel, or sub-panel. Sometimes, electrical issues also arise after natural phenomena like an earthquake or a storm.

Septic System Failure

A failed septic system is grounds for red-tagging. Some septic issues that may arise include a broken system or leach fields close to bodies of water like rivers, streams, and wells. 

The septic system needs a proper percolation test and must be installed correctly in the location stated on the original plan submitted for permit approval. It will be red-tagged if there are violations of these rules upon inspection by the health or building inspector.

Gas Leaks

Gas leaks are dangerous and can be fatal. A home can be red-tagged if there is a problem with the gas line. Any signs of gas smell are a tell-tale sign that a gas meter or gas line is leaking. 

Other problems related to gas include damaged supply lines and corroded gas components. Using a flexible gas supply line may also cause a problem.

Similarly, an improper gas line installation is also a red tag issue. Furnace and stove tops are also checked to ensure that they function properly. Otherwise, the home may be red-tagged until the problem is fixed. Calling a gas company technician will also help determine the problem so that fixes can be done.

Structural Questions

Each state and city have its own codes and laws regarding building construction. The safety of the occupants relies on the house structure. If the structure is built substandardly with code violations, it cannot guarantee a strong foundation and may collapse on the people living inside. 

Once codes are unmet, it can result in a red-tagged property. The red tag label is only removed once the issues are fixed to meet the local building codes.

Can You Live In A Red Tagged House?

can you live in a red tagged house

You are not allowed to live in a house that has been red-tagged because the house has been deemed too unsafe to be inhabited. If your local city code enforcement officers find out you are living in a red-tagged house you will be notified to vacate. On top of that, the police may open an investigation into the owners, and the people living in the hazardous conditions with the potential to charge them with crimes. 

Different jurisdictions and code enforcement officers will treat each living situation in different manners but at the end of the day, you are not allowed to live in, or rent out, a property that has been red-tagged. If you are found out you could end up in jail or fined like what happened in the City of Lansing.

house in danger concept

Red-Tagged Effect on the Title

The red tag label is visible both physically and on the title. Local officials may put a large orange or red sign indicating the place is unsafe and should not be occupied. 

Entering the property without a permit is illegal, and you may be arrested for trespassing. That is why you cannot truly hide the fact that your home has been red-tagged from potential buyers.

A red tag is also disclosed through the preliminary title report, the report the buyer receives when an escrow is opened for the sale. 

A red tag discourages buyers from purchasing the property because of the liens and other problems that come with it. No financial institution will also finance the purchase of the property until the issues are resolved.

Why is it Hard to Sell a Red-Tagged House?

Can you sell a red-tagged house? Probably, yes. But, not without facing numerous challenges first.

Selling a red-tagged house may not be as difficult as finding a needle in a haystack, but it is still hard to do. Most lending institutions won’t finance a property with a red tag issue, limiting your potential buyers to those who have the cash to purchase the house.

Additionally, red-tag-labeled properties do not do well on the market. They are often listed for longer periods – some ending with a sale, while some do not. 

Even if you try to sell a red-tagged house for a low price, buyers are wise enough to stay away from it. Fixing the problems of the property might be more expensive for them despite the low price tag of the house itself.

How to Deal with a Red-Tagged Property?

You must get rid of the red tag to sell your house quickly. But, you cannot do it if you don’t understand your violations in the first place. To deal with a property red-tagged by the local officials, do the following:

  1. Check and understand your violations. Upon receiving a red tag notice, check the citation part where it clearly states the problem/s that need fixing.
  2. Contacting a professional to address the issue is highly recommended. Problem with gas leaks? Septic tanks? Electrical wiring? Or perhaps issues with sanitation or structural defects? Whatever the problem/s are, professionals are always at hand to deal with them.
  3. Fix it! Work together with your hired professional to fix the problems. Resolving them immediately removes the red tag from your house. There is also a deadline for the fixes. If you miss the deadline, you will be charged with a penalty.

How to Sell a Red-Tagged House Faster?

Can you sell a red-tagged house faster? Yes, you may. If you don’t want to do the fixing yourself, you can still sell a red-tagged house.

Real estate companies that can purchase the property in cash make the best, and probably the only, option. Dealing with a cash buyer is also faster than in traditional home selling. 

The best part of cash buying is the lack of stringent rules. Bank financing requires the seller and buyer to come up with all sorts of documents. Meanwhile, cash buying is completed efficiently by simply sending your application to the company.

Your application is reviewed upon receipt. As soon as the assessment results in the property meeting standards of requirements, they will contact you about negotiating. If you agree on a deal, they will proceed with the purchase and pay you in cash.

Apart from its fast and easy transaction, cash buying requires minimal effort from the seller. You don’t need to clean the house for a home show; you don’t have to stress over paperwork, and you don’t need to list and wait long in the real estate market. 

All of the things related to the sale are mostly done by the buyer. So, if you don’t like a stressful sale, selling to a home-buying company that pays cash and closes as fast as you need is the ideal way to sell a red-tagged house!

If you’re looking for a cash buyer for your home, WeBuyHousesInDenver.org is your solution to selling your house, because as Denver’s number 1 cash home buyer we will buy any house in any condition so if you want a cash offer on your property simply give us a call or fill out an online form and our team of experts will get to work, quick smart, to help you get your house SOLD!

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