Disclosures and Home Warranties
Most states now require a property condition report when you list a home for sale with an agent. If you're offering your house as a FSBO you may or may not be required to use this form. But, whether it is required or not…get one and fill it out.
The property condition report is a disclosure to the buyers of everything you know about your house and property that could affect them financially. Filling out the form completely and honestly…and making sure that the buyers read and sign it… will protect you in lawsuits.
It is, of course, tempting to hope that someone doesn't notice that little crack in the basement wall that lets in dampness during the rainy season. Erase that thought. If you fail to disclose the buyers can sue. And many will.
You might also be tempted to let the home inspector find what he or she can and assume the liability for things overlooked. Erase that one too. If the inspector misses something, he or she is protected by a clause in the contract. If you fail to disclose something that you know about your home for sale, you have no protection.
If there was a past problem whose results are obvious (such as water stains on the ceiling) and you have had the problem corrected, state it on the form and furnish proof of repairs.
Different states operate under different laws and thus use different forms, so the following items may or may not be included on the form you use. If they are not, your agent is probably prohibited from telling buyers without your permission. Carefully consider how you want to handle these issues.
- Registered sex offenders in the neighborhood
- Death in the house or on the grounds
- Suicide in the house or on the grounds
- Violent crime in the house or on the grounds
- Serious illness in the house… (AIDS is a major concern for many.)
- Paranormal activity. (Yes, some people are afraid of ghosts.)
- A history of divorce with past residents.
All of these issues are important to some people. You may not believe in ghosts, but others do. You may not believe a house can hold "negative energy" but others do. You may be 6"8" and 300 lbs... so the sex offender doesn't threaten you in the least… but your potential buyers may have small children, vulnerable teens, or an overwhelming fear of being attacked themselves.
If you are not legally required to disclose and choose not to, you can still be sued, because you can be sued for anything. But the question is more moral and ethical than legal.
Home Warranties
Home warranties, taken out at the time a house is listed for sale, are growing in popularity. And for good reason.
Many buyers deplete their resources making a down payment and fear the prospect of unexpected expenditures in the first few months after purchase. The Home Warranty alleviates that fear.
Major appliances and systems are covered, so if the furnace fails or the septic tank caves in, the warranty is there to save them.
Sellers are also happy because they are not unreasonably expensive, they save the seller from some implied liability after closing, and they make the house more attractive to buyers.
If you're getting ready to offer your house for sale, research availability and consider offering this safeguard to you and your buyers.
Click here to contact me if you have any questions.
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