If you're
putting your home on the market, better be sure you're ready to tell all - good
and bad.
The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of deal and coming to the belief that the seller knew but didn't tell them.
Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home's heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their 4-year-old child survived. The seller was convicted of involuntary manslaughter.
This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.
While certainly this isn't a typical scenario, it gives good reason to pay attention to the details that you're disclosing when selling your home. It's not worth it to leave off some important details just because you think the home won't sell or will sell for less money if you disclose any problems.
BUYER CAN DECIDE Top
The seller might adopt the attitude that there was something wrong but it's not any more; therefore, he does not have to disclose it. This is fairly risky. If Seller’s haven't disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it's been disclosed, then the buyer can elect what to do with it."
In most cases, the buyers won't decide to do anything further. He says this is because the problem has been disclosed by the seller and reported that it's been fixed. This will allow the buyers to feel that the problem has been completely resolved and therefore will not hold up the sale of the home. Buyers are not unreasonable and if you are honest with them they will feel safe in the purchase.
Reporting all problems with the home, regardless of whether they have been fixed, is the safest way to sell your home. Making sure you keep good records is vital because, as the years pass, many sellers forget about all the repairs they've done to the property.
It is also a good idea for every homeowner to have a file of everything they do to the house. This file could be given to the buyers for them to review. The file should show all problems and how they have been repaired, complete with receipts.
Even though legally there's no real requirement to tell about fixed problems, those are as critical as the existing problems. When you don't report a problem, buyers generally learn about it from neighbours and then assume that you were not telling the truth when you sold the home.
Sellers often resist disclosing problems for fear that their homes won't sell but that's generally fallacy. If the problem is major you cannot take the risk of not disclosing and if the problems are minor, rather negotiate now, than face later litigation - creating a huge headache.
If the seller properly discloses all issues with the home, the buyer can make an educated decision to buy or not. The fact is that the vast majority of buyers don't walk away. They decide to buy a house because they've determined it's the house for them. Once they've made that decision they usually find a way to make it work.
WHEN TO DISCLOSE Top
When's the best time to disclose? Right away. The good real estate agents will get whatever negative information there is out there as fast as possible, as the first opportune time. Once buyers make a decision to go forward they will have made their decision based upon all these factors, including the not so good. Professional agents are also good negotiators – they will make sure you get the best deal possible – despite disclosing some problems.
When you tell all before you sell, you're positioning yourself not only for a successful home sale but also a headache-free post sale.
We as a matter of standard procedure have all our sellers complete a Seller Declaration form and recommend you report ALL known defects on the form, prior to commencing with the marketing programme. This allows us to discuss if necessary, with legal counsel which issues should be raised within the contract and which not.
In our experience, this shows the Buyer that you are transparent and puts them at ease - after all, they are buying a second hand home and are expecting certain defects to be in place
The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of deal and coming to the belief that the seller knew but didn't tell them.
Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home's heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their 4-year-old child survived. The seller was convicted of involuntary manslaughter.
This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.
While certainly this isn't a typical scenario, it gives good reason to pay attention to the details that you're disclosing when selling your home. It's not worth it to leave off some important details just because you think the home won't sell or will sell for less money if you disclose any problems.
BUYER CAN DECIDE Top
The seller might adopt the attitude that there was something wrong but it's not any more; therefore, he does not have to disclose it. This is fairly risky. If Seller’s haven't disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it's been disclosed, then the buyer can elect what to do with it."
In most cases, the buyers won't decide to do anything further. He says this is because the problem has been disclosed by the seller and reported that it's been fixed. This will allow the buyers to feel that the problem has been completely resolved and therefore will not hold up the sale of the home. Buyers are not unreasonable and if you are honest with them they will feel safe in the purchase.
Reporting all problems with the home, regardless of whether they have been fixed, is the safest way to sell your home. Making sure you keep good records is vital because, as the years pass, many sellers forget about all the repairs they've done to the property.
It is also a good idea for every homeowner to have a file of everything they do to the house. This file could be given to the buyers for them to review. The file should show all problems and how they have been repaired, complete with receipts.
Even though legally there's no real requirement to tell about fixed problems, those are as critical as the existing problems. When you don't report a problem, buyers generally learn about it from neighbours and then assume that you were not telling the truth when you sold the home.
Sellers often resist disclosing problems for fear that their homes won't sell but that's generally fallacy. If the problem is major you cannot take the risk of not disclosing and if the problems are minor, rather negotiate now, than face later litigation - creating a huge headache.
If the seller properly discloses all issues with the home, the buyer can make an educated decision to buy or not. The fact is that the vast majority of buyers don't walk away. They decide to buy a house because they've determined it's the house for them. Once they've made that decision they usually find a way to make it work.
WHEN TO DISCLOSE Top
When's the best time to disclose? Right away. The good real estate agents will get whatever negative information there is out there as fast as possible, as the first opportune time. Once buyers make a decision to go forward they will have made their decision based upon all these factors, including the not so good. Professional agents are also good negotiators – they will make sure you get the best deal possible – despite disclosing some problems.
When you tell all before you sell, you're positioning yourself not only for a successful home sale but also a headache-free post sale.
We as a matter of standard procedure have all our sellers complete a Seller Declaration form and recommend you report ALL known defects on the form, prior to commencing with the marketing programme. This allows us to discuss if necessary, with legal counsel which issues should be raised within the contract and which not.
In our experience, this shows the Buyer that you are transparent and puts them at ease - after all, they are buying a second hand home and are expecting certain defects to be in place
SHARE THIS WITH SOMEONE
THAT NEEDS TO KNOW