What does it mean when a property has been RED-TAGGED?

By
Real Estate Broker/Owner with Safe Haven Realty CalBRE# 01433049

Sonoma County Fixer UpperWhat does it mean when a property has been RED-TAGGED?

In a nutshell, if a property has been red-tagged, the county in which the property resides has a recorded lien or liens against the property because of a violation that the property owner failed to cure. In some cases, a "red-tagged" property is deemed uninhabitable.

This "red-tag" lien will show up in a preliminary title report, a report that is delivered to the buyer of a property shortly after escrow has been opened. If there is a recorded lien of this nature on a property that you wish to purchase, you can forget about obtaining a loan until the liens have been cleared. Because of this, many red-tagged properties sell for cash at a price that is well below market value.

 

Here are a few reasons why a home might be red-tagged:

1) Modifications or improvements done without the benefit of permits.

2) Modifications or improvements done incorrectly.

3) The septic system has failed.

4) The septic leach lines have been found to be too close to the well.

5) Grading, excavation or fill dirt activity without permits.

6) Zoning violation.

 

If you are considering buying a property that is red-tagged, you need to understand the risks involved BEFORE you write an offer. To do this, pay a visit (with your REALTOR® and/or contractor) to the county code enforcement department. They can explain the process of obtaining the necessary permits and work that must be done to remedy the situation.

 

* Be sure to check with your local REALTOR® to know what "Red-Tagged" means in your area. This blog post is based on what red-tagged means in Sonoma County, California.

 

 

 

Posted by

Cynthia Larsen is the owner and broker of record for Safe Haven Realty and has worked and lived in Sonoma County for over 25 years. For more information about Sonoma County, check out the communities of Bodega Bay - Cotati - Rohnert Park - Santa Rosa - Windsor.

 

To view all available homes for sale in Sonoma County and individual communities, please visit Sonoma County Homes For Sale Online!

 

 

Cynthia Larsen
Broker/Owner - Safe Haven Realty

Sonoma County, California, USA
(707) 332-2560

www.cynthialarsen.com


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Re-Blogged 1 time:

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  1. Evelyn Kennedy 10/11/2012 12:51 PM
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Rainer
51,252
Lucas Taylor
Keller Williams Miami Beach - Miami Beach, FL
Thank you for the great education. I learned so much from your post.
October 11, 2012 12:40 PM #1
Rainmaker
105,507
Steve Ewing - The Nines Team at Keller Williams Realty
Keller Williams - Stockton, CA

Cynthia - What about the heating unit being red tagged for a cracked burner by the local gas provider i.e. PG&E?  If the tag has been removed then there is no way of knowing it was tagged.  An home inspection might not catch that one.  It might not be caught until it is too late and someone has been injured.  Thanks for the blog.

October 11, 2012 12:45 PM #2
Rainmaker
648,389
Evelyn Kennedy
Gallagher & Lindsey, Alameda, California - Alameda, CA
Alameda, Real Estate, Alameda, CA

Cynthia:

Thanks for this very helpful post.  Most people think red tagging a home means it will fall down around them.  Not so.

October 11, 2012 12:48 PM #3
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Lucas - you're welcome!

Steve - that is another example, a utility company can issue a red-tag when a system fails. Electrical, gas and water are the most common. This is why red-tags are so important to know about, especially when buying or selling a property.

Evelyn - And sometimes the home is falling down ... but the red tags that can be the most important are the ones that aren't obvious.

October 11, 2012 12:51 PM #4
Ambassador
1,410,078
Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Phoenix Real Estate Agent, CRB, CRS 602-380-4886

Cynthia I don't believe we use this term here in AZ.  This is very interesting to me and quite frankly it makes a lot of sense for potential buyers.   I've seen electrical systems or gas meters red tagged - but that's the only thing I've ever put 'red tag' on it.

October 11, 2012 01:00 PM #5
Ambassador
1,487,715
Tammy Lankford
Lane Realty - Eatonton, GA
Your Lake Sinclair Expert (706-485-9668)

recently found some "orange stickers" on the door of home I was showing for similar issues.  Here, right now, it generally takes a neighbor complaint to cause such action.

October 11, 2012 01:01 PM #6
Rainmaker
565,341
Kathy Sheehan
Movement Mortgage 770-634-4021 - Atlanta, GA
Branch Manager

Any home buyer should be very cautious if they see these type of violations.

October 11, 2012 01:33 PM #7
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Anna Banana - Many of the red tags I've seen, since I live in a rural area, have had to do with septic systems which will deem a property uninhabitable. Right now I'm dealing with 50 yards of fill dirt that was brought in, a botched roof replacement and the unpermitted addition to a barn. Sheesh!

Tammy - ah, so you have orange tags! Yes, many times it is a neighbor that squeals on a property owner.

Kathy - no kidding! Don't run, just educate yourself. Some of these violations can be cleared up fairly easily. Others, not so much.

 

October 11, 2012 01:43 PM #8
Rainmaker
238,346
Peggy Hughes
PHA/Peggy Hughes Associates - Professional Moving Organizer - San Francisco, CA
SF NYC LA

Hi Cynthia... does the homeowner get notified before they put the home on the market? Or, does the tagging come about because of a pre-inspection and the inspector must notify the County?

October 11, 2012 01:50 PM #9
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Peggy - the home owner knows when their property has been red-tagged. They get notified by the county code enforcement folks or the utility company via mail. Whether the owner tells their agent that their home is red-tagged is a whole 'nuther story. I'm dealing with a bank owned property right now with multiple red tags, the tenant clued me in as there were no visible tags (stickers) left behind for me to see.

October 11, 2012 01:57 PM #10
Rainmaker
1,395,931
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Very useful information Cynthia...........I've heard of this before.

October 11, 2012 04:41 PM #11
Ambassador
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Paul Henderson
RE/MAX Professionals. - Tacoma, WA
I always put my clients first in any transaction!

We all call it something different but I prefer red tagged because it means beware!

October 11, 2012 04:52 PM #12
Rainmaker
238,346
Peggy Hughes
PHA/Peggy Hughes Associates - Professional Moving Organizer - San Francisco, CA
SF NYC LA

thanks so much, Cynthia... I was wondering whether or not homeowners would be forthcoming with the information of whether or not their properties had been tagged... you guys really do deal with alot!

October 11, 2012 05:06 PM #13
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Roger - I learn more about this with each red-tagged property I encounter. I've spent at least 4 hours at the county permit resources and management building this week alone trying to sort out the status of a property.

Paul - whatever you call it, it's a problem that must be dealt with, huh?

Peggy - Many times the homeowner is long gone since they can't live there comfortably (or safely). Yes it's amazing what we deal with, isn't it? It's nothing like our public image, that's for sure!

October 11, 2012 05:32 PM #14
Rainmaker
447,863
Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

Darn, and here in Canada Toyota has been telling me that red tags were good things.

October 12, 2012 09:38 AM #15
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Malcolm - red tags on clothes = good. red tags on cars = good. red tags on houses = not so much.

October 12, 2012 10:33 AM #16
Rainmaker
538,248
Ginger Harper
Coldwell Banker Sea Coast Advantage - Southport, NC
Your Southport~Oak Island Agent!

Red Tagged...usually means your seller has a real problem.

October 12, 2012 11:45 AM #17
Rainmaker
177,110
Erv Fleishman
Realty Associates - Boca Raton, FL
Luxury Prop Specialist Realty Associates

Tags need to be addressed and time will have to be spent down at the city hall. Work, work work. 

October 12, 2012 03:33 PM #18
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Ginger - yep!

Erv - oh my gosh, where we have to go to talk to code enforcement lets you know up front that your visit will be between 1 to 3 hours ... and I've done that twice already this week.

October 12, 2012 03:42 PM #19
Ambassador
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

Cynthia - If a buyer's considering buying a red tag home, they need to understand what they are getting into, and you've done a good job explaining it.

October 13, 2012 12:00 AM #20
Rainmaker
969,957
Gary L. Waters, Broker Owner Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Melbourne, FL
Personal Service, always.

I guess this "red tag" sale is not what most expect when they hear a red tag sale!

October 13, 2012 05:42 AM #21
Rainmaker
568,430
Hella Mitschke Rothwell
(808) 226-1095 or (831) 626-4000
Hawaii & California Real Estate Broker
I've learned to go to the planning department and tax assessor for each new listing in this neck of the woods. Incredible what comes up that sellers don't think to tell you.
October 13, 2012 06:34 AM #22
Rainer
221,958
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

seen this before ... rare ... but a good deal can be had ... investors like it ... good info

October 13, 2012 07:06 AM #23
Rainer
54,776
Rob Renk
McKinney, TX
Gap Funding | from $10,000 up to $200,000

I've never had this happen with any of my deals.  it is a good thing to be made aware of.  Thanks for the post.

October 13, 2012 07:37 AM #24
Rainer
88,409
Bernadette A. James
Serving Sugar Land, Missouri City, Richmond and Pearland - Sugar Land, TX
Broker-Associate, Keller Williams Realty SW

Interesting. Learn something new everyday.

October 13, 2012 07:46 AM #25
Rainer
118,886
Ron Aguilar
Real Estate Buying Advice - Salt Lake City, UT
Mortgage & Real Estate Advisor since 1995

I guess that's why the tag is red

October 13, 2012 07:58 AM #26
Rainmaker
310,047
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

Good info. in California we use a Red, Yellow and Green tag system on home that have been subjected to a disaster i.e. Fire, Flood, Wind or most commonly Earthquakes. A Red tag means the home is deemed uninhabitable and not safe to reenter even for keep sake's. It's condemned and most often a total loss 

A Yellow tag means it's seriously damaged but only temporarily inhabitable or until such time as the damages have been repaired the home reinspected and the yellow tag being replaced by a green tag. A green tag obviously means the home may have incurred some minor damages but they are usually more cosmetic than structural and the homeowner is free to occupy without further interruption from building jurisdictions. 

October 13, 2012 08:35 AM #27
Rainmaker
296,972
Michael J. O'Connor
Diamond Ridge Realty - Corona, CA
Eastvale - 951-847-4883

Locally the code enforcement people are showing up on very recently foreclosed homes and actively inspecting and red-tagging properties.  It seems a little bit discriminatory as they aren't going to ALL homes or only responding to complaints, but rather heading out due to the fact a house was foreclosed.  I do understand that the banks have deeper pockets than other homeowners and thus 'can' pay the money to fix up the house.  But I've had several properties get cited during the escrow process and it really gums up the entire process once we've started an escrow and then we have these enforcement actions implemented.  Resolving the issues seem to come down to me as the listing agent to spend a bunch of time to research, obtain quotes for remediation and then have the work scheduled.  The alternative is to just take the commission hit because the property goes to an all-cash investor for xx% less.  

October 13, 2012 09:25 AM #28
Rainmaker
630,004
Stephanie/Bob The Ruiz/Miller Team
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Cynthia, we are not aware of red tags here, but will watch.  Thanks for the informative post!

October 13, 2012 10:33 AM #29
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Christine - thank you! Yes, it's another buyer beware issue.

Gary - nope ... not exactly a blue light special either!

Hella - that is a good practice!

Lehel - it isn't too rare here ... lots of improvements going on without permits.

Rob - watch ... it will happen next week.

Bernadette - on Active Rain you will indeed learn something new every week. Thanks for stopping by!

Ron - LOL, you are so observant!

John - sounds like a good system you have in your area. Luckily, a red tag here can easily be cured if the house isn't falling down. Sometimes it's just a matter of pulling a permit and scheduling a visit from a code enforcer.

Michael - sounds like the city or county is using the foreclosure situation as a opportunity for revenue. That has happened here as well and has caused a lot of frustration with buyers and their agents. "Gums up" is a very good way to put it, I'm going to use that.

Bob - now that you know about them you'll probably see one in the near future. Happens every time!

October 13, 2012 10:49 AM #30
Ambassador
1,146,764
Paul Henderson
RE/MAX Professionals. - Tacoma, WA
I always put my clients first in any transaction!

Great featured post Cynthia. I had to read it again!

October 13, 2012 11:48 AM #31
Rainmaker
587,443
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

I have sold homes for 20 years and never seen a RED TAG - is this something that happens Nationwide or just in your state?  I will have to do some research.  Thanks for the education!

October 13, 2012 12:40 PM #32
Rainmaker
799,182
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

In our county, red tags are (were) used during the construction phase. They mean "Stop right now and fix this before you go forward."

I say "were" because a few years ago the commissioners fired the building department. All we have now is building location permits, septic/sewer permits, driveway permits, and electrical permits.

Red tags can still come into play over those items - as when someone has started building too close to the river. Then it means "You can't build here. Stop. Tear it down."

I've never seen / heard of a red tag being slapped on an existing house. I've also never heard that a red tag resulted in a lien. Every state and county has it's own rules...

October 13, 2012 11:34 PM #33
Rainer
276,027
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Kimo's Lifestyle Solutions

Great informtion. Thanks for the lesson.

October 14, 2012 01:40 AM #34
Ambassador
671,601
Karen Crowson
Alain Pinel Realtors, Pleasanton, CA - Livermore, CA
Livermore Wine Country Homes

Hi Cynthia - long time no see. (My fault). Haven't run across this personally....yet. But I did see red on properties once, and it was very scary. It was after Hurricane Katrina. I was in Bay St. Louis on a church clean-up mission. Some of the houses had boarded up windows and huge red circles on the doors, with number codes inside of the circles.  Others had black circles. But if red? It was all bad, but red was a big warning sign to keep out.

October 14, 2012 06:36 AM #35
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Paul - thanks!

Joy - I'm not really sure how other counties and States handle code enforcement violations, they are probably all different. Let me know what you find out.

Marte - interesting! Yes, the liens here help to keep a property from exchanging hands until the problem has been resolved.

Kimo - thanks for stopping by!

Karen - wow, that sounds like quite a mission. That must have been pretty scary.

October 15, 2012 09:44 AM #36
Rainer
83,887
Brad Baylor
ERA Coup Agency - Milton, PA

Cynthia - This is a great post... thanks for the helpful tips.  We have an agency that has "red-tag" sales on their properties, but this is a far different type of red-tag.  They use it kind of like if you're buying a pair of slacks at Macy's or something and they're on a red-tag sale... lol.

October 17, 2012 07:29 AM #37
Rainmaker
261,430
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

These properties have problems. If you can cure the problem, you can sometimes make a tidy profit. I actually prefer to buy properties for myself that have cureable problems.

November 30, 2012 09:46 PM #38
Rainmaker
533,246
Cynthia Larsen
Safe Haven Realty - Cotati, CA
Sonoma County Real Estate Broker

Brad - yep, kind of like a car lot. These red tags can be dealt with, but you really need to know how to work the system.

Wayne - hey, an Oregonian, that's where I'm from! Yes, the person who buys the property that inspired this post will do well.

December 01, 2012 06:58 PM #39
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Rainmaker
533,246

Cynthia Larsen

Sonoma County Real Estate Broker
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