Selling Your Home - Disclosure
Whose obligation is it to disclose pertinent information about a
In most states, it is the seller, but obligations to disclose
information about a property vary. Under the strictest laws, you and your agent,
if you have one, are required to disclose all facts materially affecting the
value or desirability of the property which are known or accessible only to you.
This might include: homeowners association dues; whether or not work done on the
house meets local building codes and permits requirements; the presence of any
neighborhood nuisances or noises which a prospective buyer might not notice,
such as a dog that barks every night or poor TV reception; any death within
three years on the property; and any restrictions on the use of the property,
such as zoning ordinances or association rules. It is wise to check your state's
disclosure rules prior to a home purchase.
What are the standard
Most purchase offers include two standard contingencies: a
financing contingency, which makes the sale dependent on the buyers' ability to
obtain a loan commitment from a lender, and an inspection contingency, which
allows buyers to have professionals inspect the property to their satisfaction.
As a buyer, you could forfeit your deposit under certain circumstances, such as
backing out of the deal for a reason not stipulated in the contract. The
purchase contract must include the sellers responsibilities, such things as
passing clear title, maintaining the property in its present condition until
closing and making any agreed-upon repairs to the property.
Do I need
an attorney when I buy a house?
In some states, you do need an attorney
to complete a real estate transaction, but in others you do not. In California, the Title Company employs their own attorneys and those costs go into the Title Insurance Policy. In other states, Title Insurance is searched by attorneys and that cost is paid by the Buyer and Seller. Most home
buyers are capable of handling routine real estate purchase contracts as long as
they make certain they read the fine print and understand all the terms of the
contract. In particular, you should be clear on the terms of any contingency
clauses that will allow them to back out of the contract. If you have any
questions at all, it may be advisable to consult an attorney to avoid future
legal hassles. In looking for an attorney, ask friends for recommendations or
ask your real estate agent to recommend several. Call to inquire about fees and
to check on their experience. In general, more experienced attorneys will cost
more, but real estate fees as a rule are small relative to the cost of the
property you are buying.
What repairs should the seller
If you want to get top dollar for your property, you probably need
to make all minor repairs and selected major repairs before going on the market.
Nearly all purchase contracts include an inspection clause, a buyer contingency
that allows a buyer to back out if numerous defects are found or negotiate their
repair. The trick is not to overspend on pre-sale repairs, especially if there
are few houses on the market but many buyers willing to buy at almost any price.
On the other hand, making such repairs may be the only way to sell your house in
a down market.
Do sellers have to disclose the terms of other
Sellers are not legally obligated to disclose the terms of other
offers to prospective buyers.
Will a neighbor problem reduce the value
of my property?
While it may not reduce the actual value, a cluttered
landscape next door can detract from the positive aspects of your home. Review
your local laws, which should be on file at the public library, county law
library or City Hall. A typical "junk vehicle" ordinance, for example, requires
any disabled car to either be enclosed or placed behind a fence. And most cities
prohibit parking any vehicle on a city street too long. It also may be
worthwhile to check into local zoning ordinances. An operator of a home-based
business usually is required to obtain a variance or permanent zoning change in
residential areas. In addition, if a neighbor's repair work produces loud
noises, he may be breaking local noise-control ordinances, which are enforced by
the police department. Before bringing in the authorities, you may want to make
a copy of the pertinent ordinance and give it to your neighbor to give them a
chance to correct the problem.
* "Neighbor Law: Fences, Trees, Boundaries and Noise," Cora
Jordan, Nolo Press, Berkeley, Calif.; 1991.
How do I get the real
scoop on homes I am looking at?
Home inspections, seller disclosure
requirements and the agent's experience will help. Disclosure laws vary by
state, but in some states, the law requires the seller to complete a real estate
transfer disclosure statement. Here is a summary of the things you could expect
to see in a disclosure form:
* In the kitchen -- a range, oven, microwave,
dishwasher, garbage disposal, trash compactor.
* Safety features such as
burglar and fire alarms, smoke detectors, sprinklers, security gate, window
screens and intercom.
* The presence of a TV antenna or satellite dish,
carport or garage, automatic garage door opener, rain gutters, sump pump.
Amenities such as a pool or spa, patio or deck, built-in barbeque and
* Type of heating, condition of electrical wiring, gas supply and
presence of any external power source, such as solar panels.
* The type of
water heater, water supply, sewer system or septic tank also should be
Sellers also are required to indicate any significant defects or malfunctions
existing in the home's major systems. A checklist specifies interior and
exterior walls, ceilings, roof, insulation, windows, fences, driveway,
sidewalks, floors, doors, foundation, as well as the electrical and plumbing
systems. The form also asks sellers to note the presence of environmental
hazards, walls or fences shared with adjoining landowners, any encroachments or
easements, room additions or repairs made without the necessary permits or not
in compliance with building codes, zoning violations, citations against the
property and lawsuits against the seller affecting the property. Also look for,
or ask about, settling, sliding or soil problems, flooding or drainage problems
and any major damage resulting from earthquakes, floods or landslides.
People buying a condominium must be told about covenants, codes and
restrictions or other deed restrictions. It's important to note that the simple
idea of disclosing defects has broadened significantly in recent years. Many
jurisdictions have their own mandated disclosure forms as do many brokers and
agents. Also, the home inspection and home warranty industries have grown
significantly to accommodate increased demand from cautious buyers. Be sure to
ask questions about anything that remains unclear or does not seem to be
properly addressed by the forms provided to you.