subject: Home Sellers Should Disclose Material Facts [print this page] Home Sellers Should Disclose Material Facts
It Sounds so simple, you have a home to sell and all you need is a buyer to buy it. The concept is simple and most times the transaction goes well and the deal gets closed. Unfortunatelyonce in awhileit doesn't go well.
Some of the biggest legal disputes (thisarticle is not intendedtoprovide legal advice)could have been resolved by followingthe simple rules of selling a home. Just as Location, Location, Location are the 3 most importantcriteriaforBuyers to consider,for Sellers it's Disclosures, Disclosures, Disclosures.
Disclosures are the forms or written statements(we always want todisclose in writing as opposed to verbally) that identify issues andmaterial facts about the property being sold.As a seller you want to disclosure facts about the property i.e. air conditioning doesn't work, toilet leaks, microwave door cracked, drainage issues etc.
Some homeowners may say, "How am I supposed to sellmy houseif I'm talking it down by pointing out the defects?" We'll you aren't talking your house down and you're notusually required to disclose anyissues (check your state for disclosure regulations)until youaccept an offer. It is always better to put the issues out front at the very start and deal with them byusing your Realtor, asopposedto paying $150 to $350per hourto an attorney at alater date.Judges look very unfavorable towards sellers who knowingly (or have the appearance of knowingly)misrepresent their properties to buyers.
Example #1:
The seller knows the roof leaks, however,instead of fixing the roofhejust waits untilSummer and repairs and paints thedamaged areas. It looks great now and an unsuspecting buyer may purchase the home and move in, only to find that in theWinter that their roof leaks. The first thing the buyer is going to do is check to see if that flaw was disclosed. If it wasn't disclosed then the seller might be subjected to....Lawsuit!!!
How do you prevent this from happening - Disclosure it!
Example #2:
You change out the carpeting and while looking at the concrete slab you notice a wide and deep crack that runs through the hall to the bedroom.Thecarpet / flooring companyinstalls the new carpeting or flooring and now the crack is covered up. You sell the home and the new buyers don't like the color of the carpeting thatwas installedanda few weeks latertheytakeout the carpeting / flooring and see the crack thatappears to have been there for awhile.
The homeowner may say "I never saw it" and many times they don't, which is perfectly okay becausethe homeowner selling the homeisonly obligated todisclose what theyknow, however, if the carpet/ flooring installersare subpoenaed andconfirm thatthe homeowner waswatching them take out and install the new carpeting and in factsaw the crack, thenhere comesa possbile lawsuit.Will the buyer'swin that claim, who knows,however, one thing is for sure, it might costtheyouthousands of dollars to winthe case.
Example #3.
You live close to a school and while the assumption may be already made that there will betraffic from the school during certain times of the day and year, it's important that the homeowner notes on theDisclosure form that trafficmany occur around the home at specific times as the result of the nearby school. If the buyers then have the parent'scars in front of their home waiting to pick up the kids getting out of school then there are no surprises and no real merit for a lawsuit because you disclosed it to the buyer early on.
Summary:
Disclose known material facts about the home. If you were buying a home, you would also want the same consideration from the seller. Just as a side note, there are situations where you won't find the seller disclosing material facts, such as, bank owned properties, non-seller occupied or many time in probate sales. These are situations where the sellers haven't lived in the property and really don't know anything about it. Check with your local area professional for the disclosure requirements.
