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It Pays to Tell the Truth When Selling Your Home

Sellers should disclose everything they know is wrong with the property. It could save money and trouble down the line.

Sellers always ask me what they are required to disclose when they are selling their home. 

The short answer is that sellers are required to disclose everything that they know is wrong with their home that they are aware of. That includes disclosing things that were wrong with the house that have been fixed.

Here is the reality. A buyer can sue a seller for non-discloser if they can prove that the seller knew there was something wrong with the house and did not disclose it. The No. 1 reason for real estate lawsuits in California is non-disclosure. Why take a chance?

During the escrow period there is a form that all sellers are required to fill out, called a Transfer Disclosure Statement, or TDS. I always encourage my sellers to over-disclose on this form. Disclose everything that you know. I would rather have a buyer cancel an escrow than have a seller think it's not that important to disclose everything. Most buyers will conduct their own home inspection.  This does not mean that you don't have to disclose everything that you know. Finding another buyer is easier than having to deal with a long, expensive legal battle. 
Here are some examples of the types of calls that I get after a buyer has moved into a home:

“Two weeks after we moved into the house, a huge limb on the tree behind the house fell down onto the roof and the roofer said that it is going to cost us $2,000 to fix the roof. I want the seller to pay for the new roof.” Sorry, that goes under the category of tough luck. How in the world would a seller know something like that was going to happen?

“We had a plumber under the house doing some work, and he saw that there was a large crack in the foundation. The seller should have disclosed that to us.” First off, why would a seller automatically know that there was a crack in the foundation? Sellers are not required to go into crawl spaces or know what is happening inside their walls. Shouldn’t the buyer’s home inspector have pointed that out when he crawled under the house during the inspection?

“We are building a pool in the backyard, and the pool contractor had to stop the construction because they found a buried pool while they were digging. The contractor wants another $5,000 to complete the work because of the extra time. We want the seller to pay for this.”

Matt Epstein is vice president of the Sherman Oaks Homeowners Association and a real estate broker with Prudential California Realty in the Sherman Oaks/Studio City office. For information about real estate-related topics, please contact him at 818-789-7408 or soMatt@aol.com.

Terry February 08, 2012 at 07:39 AM
I don't know which is more disgusting, sellers who don't disclose all the defects they know about or buyers who try to chisel a bit more money out of the seller for defects that were not known by the seller.

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