By: Glenn Necklen
If you've sold a home recently, you know the process of completing the seller property disclosure forms. Minnesota statutes require that any home seller must disclose, in writing, anything that "might affect the buyer's right to use and enjoyment" of the property or any "material defects" that are known to the owner/seller.
Of course, there are countless disclosure items that could potentially lead to a buyer/seller dispute, but from my team's experience, here are the top 3 items that often get sellers into disclosure trouble?
1. Wet Basement / Foundation:
Most homeowners are keenly aware of any basement water issues. Even if the basement is finished, there is usually some evidence if there is a water intrusion or foundation issue. Because this can be such a costly and scary concept for most home buyers, it is vital for a seller to be forthcoming with any known issues regarding a wet basement. If a buyer notices an obvious issue shortly after closing, it is difficult to believe a seller who claims to have been unaware of the problem. That's why buyers typically pursue a seller for money in this situation. The best advice to a seller is to, not only be completely forthcoming, but to be as thorough and specific as possible when disclosing basement water or foundation issues.
2. Heating / Cooling (HVAC) Issues:
When home buyers worry about costly repairs in owning a home, the thought of replacing a furnace or air conditioner is at the top of their concern list. Sellers don't like spending money to repair/replace these expensive items before selling just the same, therefore, sometimes sellers withhold any knowledge or awareness of failing heating and cooling systems. Being most home inspectors recommend a "certification" of these items as a routine measure, home buyers often find out potential issues during their inspection contingency. In these cases, problems are usually negotiated prior to closing. But in cases where existing issues aren't disclosed or identified during a buyer's home inspection, only to be later identified after closing, home buyers are empowered to pursue the seller financially.
3. Pest Infestation (mice, ants, etc...):
Homeowners often have minor issues with pests. This is a common and not surprising thing. Many sellers think that if the problem has been resolved, there is no need for disclosure. So at what point does a pest problem become a disclosure item? The most practical answer is that any pest problem is best to be disclosed, ESPECIALLY if its recurring. If the problem has been resolved, then at least a seller was forthcoming with the original issue and the buyer is then able to monitor the situation. We've seen too many home buyers left in the dark regarding pest problems, which usually then leads to a dispute.
A seller's obligation to disclose can seem boundless, but a best practice we recommend to our clients is to disclose those things that you would want to know if you were buying the home. This concept seems to bring out the main items of concern. Not a perfect science, but a practical view.
Contact me if you have a question about what a seller should disclose.http://www.mndreams.com/contact/
Glenn Necklen is Broker / Owner / REALTOR at Necklen & Oakland- Professional Real Estate services in Maple Grove, MN.