Earlier when people used to buy homes, they were told to be careful as sellers were under no obligation to tell buyers about flaws or problems with the house. As a buyer, you had to be responsible for finding out everything about the house, zoning laws and defects and problems. Thankfully, over the years things have changed and now majority of the states have laws that protect the buyer.
So, if you are a homeowner and intend selling your home, make sure you know the major defects in your home. If you do not inform the buyer about these defects, it is illegal and can result in a lawsuit.
You could be asked to make a voluntary disclosure or it could be mandatory, depending on which state you are living in. Nonetheless, more and more states are making it obligatory for sellers to disclose the condition of their property to avoid legal hassles and disputes after the sale is closed.
In several states, it is obligatory to disclose the condition of the property using the seller disclosure form. This form contains a list of questions that the seller has to answer truthfully and honestly. Usually, the answers are simple yes, no or don’t know. So, if there is something you are unaware of, it is perfectly alright to write don’t know. Once this disclosure form is filled, it is attached to the sale agreement.
In states where there is a law that does not require written disclosure, some real estate agents make it mandatory for homeowners to list disclose facts and defects about their property before they can list the property.
There are other states that require homeowners to give oral disclosures. In such cases, the buyer usually makes a written record of the disclosure for future reference or may even ask the seller to give it in writing.
If there is any material facts that can have an influence on the price or decision of the buyer should be disclosed. While this can be subjective, you should disclose the information that you are aware of.
Some of the things that you should let the buyer know before getting him or her to sign on the dotted lines are:
Remember, if you have some information and are wondering whether to let the prospective buyer know, consult your attorney. He will be able to guide you. This will save you a lot of trouble later on.
If you knew about a defect in your property and did not let the buyer know before the sale was closed, it is an offense. The buyer is within his rights to sue you and get you to pay for the repairs and other damages that the property may have sustained because you failed to disclose the defect. Sometimes, the buyer may even convince the judge to invalidate the sale.
Just remember, failure to disclose defects and issues with your property could turn out to be an expensive mistake. Not only would you have to pay your attorney, you would also have to foot the bill of the buyer’s attorney and the cost of repairs and other damage. In case the judge rules you committed fraud by withholding information about the property, you will have to pay punitive damage to the buyer. This amount could run into millions.
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