Beware Seller's Statements

The Latin term, “caveat emptor,” means “let the buyer beware.” In today’s marketplace, buyers should be especially cautious in relying on statements made by Sellers.

Even though approximately 30 states have laws that require sellers to inform buyers in writing of any problems or defects in the property, sellers are not always honest in disclosing the facts regarding the property. This is especially true in today’s market, where some sellers are desperate to sell.

    Common misrepresentations include: the size of the parcel, the square footage of the home, leaky roofs, insulation, heating and utility costs, moisture and mold problems, and whether or not the property has been subject to flooding or other environmental damage.    Look for unrecorded improvements like decks, finished basements and garages converted to living space.

      Misrepresentations regarding the square footage of a home can result in an appraisal coming in lower than expected, which affects the ability to obtain a loan on the property.   If the property has had certain type of insurance claims, you may not be able to obtain homeowner’s insurance, which will also prevent you from obtaining a loan. Buyers can find out a home’s history of property damage by buying a report from the Comprehensive Loss Underwriting Exchange (CLUE). Find out about CLUE HERE.

       A carefully drafted purchase contract, that provides for cancellation of the purchase with a full refund to the buyer in the event the appraisal comes lower than the purchase price and also provides for the buyer/or his/her home inspectors to conduct inspections and that if anything is found that is unacceptable to the buyer, the seller will either correct the condition with a specified time or the buyer may cancel the purchase with no obligation, could help to prevent surprises to the buyer as well as litigation. Another contingency to the purchase contract should be the buyer’s ability to obtain a loan. If the buyer cannot obtain a loan after reasonable attempts, the buyer should be able to cancel the deal without obligation.

      Buyers, do your due diligence! Investigate, inspect and have professionals advise you before closing the purchase. Always have a real estate attorney review your purchase contract BEFORE you sign it.