In today’s tough economic climate, people are getting creative with ways to generate income. One of them unfortunately is the good old American lawsuit.
Most lawsuits in real estate transactions, are the result of buyers feeling that the seller did not tell them all they knew about the house, before they bought it. Don’t think Buyers find out about things once they move in? Guess again!
When it comes to disclosing things you are aware of about your home or neighborhood, noise problems or other nuisances, don’t be shy about letting the Buyer know.
If you don’t disclose that the area has problems with airport noises, or garbage odors from a nearby dump for example, not only would the new owners of the house will find that out within days of moving in, your friendly neighbors, the “welcome wagon” will spill the beans just as they greet the new owners with a courtesy visit to welcome them into the area.
Here’s an actual case.
The previous owners had disclosed to a Buyer that the house has had a problem with the foundation when it was being built… 35 years before! The result of that problem was that the foundation was reinforced better than any other home in the area, and in the previous owner nor The Seller never had a problem while they lived there. The buyer, however, sued him for non disclosure.
After 2 years of depositions, thousands of dollars in lawyer’s fees, and countless sleepless nights, the arbitrator awarded the buyers $120,000 which they used to upgrade the entire house, because there was nothing wrong with the foundation. The legal fees for both parties were paid by the home seller.
But how did the new owner know? The neighbor across the street came to greet the new owners, and as they unloaded their belongings, she told them the history of the house, and how the foundation gave way, and how it was fixed. The new buyers felt they should have been told, consulted an attorney who made a case and got some money from the seller.
As you can see, you do not have to necessarily do anything wrong, all you have to do to get into legal trouble is to not pay attention when filling out The Real Estate Disclosure Statements.
Most home sellers have no idea how easy it is to land in court with their home buyer. A few steps outlined here can help, if followed properly.
When selling a home, by law, the home sellers have a very serious obligation of disclosing in writing to the home buyer any and all defects that they know about the property.
Your Realtor will provide you the right forms, it is up to you to fill them out, completely, truthfully and seriously. If you want to keep your money and stay out of court, follow these simple steps with care:
- Spend time looking over the Seller Property Disclosure Statement and make sure you understand every question before you answer it. The questions in these forms are geared towards making sure you don’t miss anything important. Keep in mind that there will be a lot of people reading what you wrote: the home buyers, the Realtors, attorneys… even the judge!
- Do not allow anyone to fill them out for you, not the Realtor, or your children or anyone else who is not on title. These are legal documents, treat them with care. Even if you know the buyer is a “friend” who you think you know. You still be treated as a “defendant” if your friend sues you.
- Tell the buyer everything you know about the house, specially if you are the typical DIY (Do It Yourself) type of guy/gal. The rule is simple: “If in doubt, disclose it.” A disclosure should be written in a clear and specific way: “… In 1997 there was a leak under the kitchen. We called ABC Plumbing and they fixed it” or “… around 2002 during El Nino rains, the basement flooded, a sump pump was installed by a plumber“
- If you did not take permits for any additions or structural modifications you made to the house, disclose that very clearly. These types of additions or modifications without permits is what puts the new occupants of the house at risk if they do not know.
Times are tighter than ever so protect yourself and don’t let the same “Welcome Wagon” that said hello to you years back, be a potential source of misery after you’ve gone.
Sal Cartagine is an award winning Real Estatet Broker with 23 years experience specializing in residential, relocation, rentals, investments and property management. Sal can be reached directly at (602) 818-3886 
If you don’t disclose that the area has problems with airport noises, or garbage odors from a nearby dump for example, not only would the new owners of the house will find that out within days of moving in, your friendly neighbors, the “welcome wagon” will spill the beans just as they greet the new owners with a courtesy visit to welcome them into the area.
Here’s an actual case.
The previous owners had disclosed to a Buyer that the house has had a problem with the foundation when it was being built… 35 years before! The result of that problem was that the foundation was reinforced better than any other home in the area, and in the previous owner nor The Seller never had a problem while they lived there. The buyer, however, sued him for non disclosure.
After 2 years of depositions, thousands of dollars in lawyer’s fees, and countless sleepless nights, the arbitrator awarded the buyers $120,000 which they used to upgrade the entire house, because there was nothing wrong with the foundation. The legal fees for both parties were paid by the home seller.
But how did the new owner know? The neighbor across the street came to greet the new owners, and as they unloaded their belongings, she told them the history of the house, and how the foundation gave way, and how it was fixed. The new buyers felt they should have been told, consulted an attorney who made a case and got some money from the seller.
As you can see, you do not have to necessarily do anything wrong, all you have to do to get into legal trouble is to not pay attention when filling out The Real Estate Disclosure Statements.
Most home sellers have no idea how easy it is to land in court with their home buyer. A few steps outlined here can help, if followed properly.
When selling a home, by law, the home sellers have a very serious obligation of disclosing in writing to the home buyer any and all defects that they know about the property.
Your Realtor will provide you the right forms, it is up to you to fill them out, completely, truthfully and seriously. If you want to keep your money and stay out of court, follow these simple steps with care:
