Eevery property has its own characteristics, and of course, not every home is perfect. It is highly likely that at some point during the ownership of the home, something happened that will need to be reported when the property is sold. As a broker, I have yet to meet a seller who does not express concerns about disclosing potential and past issues that might affect a buyer’s decision. This concern raises the question: what and how much does the seller say not only to his broker, but also to potential buyers?
Deliberately withholding pertinent property information is likely to put the seller in a serious enigma that could / will lead to a sale failure and possibly legal ramifications. There have been many cases of lawsuits across the country in which sellers paid buyers significant amounts of money because the seller was not frank or honest with relevant property information.
Think about it in parallel with online dating. A person sees a profile that is interesting to him. Everything looks good and there is a certain level of confidence that the other side is transparent and open. Then they meet, and it turns out that the information provided was less frank. I use this analogy to say that in most cases the reality of the situation eventually manifests itself; whether it’s a real estate sale or a Tinder cruise.
Real estate brokers work not only to help sell their property, but also to protect the seller from potential problems before, during and after the transaction. I cannot stress enough how important it is to discuss all potential issues with a real estate broker. Realtors are here to help the seller go through this process, protect them from potential sale disruptions due to inability to disclose information, and mitigate potential disclosure issues.
Some of the most common areas of exposure are lead based paint, pests, fire, and mold / water damage. With regard to water damage (such as the recent severe winters that caused leaks), I cannot stress enough the importance of disclosing any history of water damage or mold. Firstly, because it appears most often in the inspection report, and secondly, because the buyer can request a full exchange of loss underwriting, commonly referred to as the CLUE statement. This allows the buyer to see any insurance claims made against the property in the past seven years.
Other areas that are important to disclose ahead of time are things like permission. Are there any construction or major renovations on the property that have not been authorized? This is very important to buyers as it identifies potential liability for correcting a prohibited design in the future. It can also determine insurance coverage and liability. The purchaser has the right to know the facts regarding the authorization so that he can make his own informed decisions about these facts as he moves forward.
It is imperative that you inform your real estate broker of any potential concerns and trust their guidance and knowledge. Realtors cannot protect you from what they don’t know. A rule of thumb is to disclose everything you know about the property. Better to be open than to let the proverbial skeletons dance from the closet later on the road.