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Vivian Olkin's Blog

By Vivian Olkin | Agent in Chapel Hill, NC

How Property Defects Destroy Your Deal….and Other Legal Hazards of FSBO

How Property Defects Destroy Your Deal….and Other Legal Hazards of FSBO

"Defects in the property" sounds ominous.  Whether you're potentially buying or selling, those 4 little words can make your stomach drop and your heart beat a little faster.   A few questions linger. Who's responsible to discover these defects -  the buyer or the seller?  Who should pay for home inspections, and at what point? Is it a good idea to sell a property "as is" or should one repair the problem before anyone signs a contract? How much is a buyer legally obligated to disclose to the potential seller?

Although extreme, there was a case of a sink hole swallowing a home in Spring Hill, Florida in May 2009. Fortunately, I wasn't the listing agent for that property. (To my knowledge, we've not had any <a href="http://www.crazyvivhomes.com/homes-for-sale-chapel-hill/">Chapel Hill homes</a> with sink holes!) Other defects aren't as dramatic - but they can be just as dangerous.
 
Did you know that the 2nd leading cause of lung cancer in the United States is indoor radon gas?  Yet this is something easily preventable. Testing is simple and fixed easily with installed ventilation methods.

Mold is another residential hazard that's gotten progressively more attention in the past 10 years. Perhaps you've noticed some of the stories in the news about various schools (from Florida to Iowa to Colorado) not starting on time - due to mold and its danger to respiratory health.  Sometimes getting rid of mold is as simple as removing carpet affected with mold spores. In other cases, removing toxic mold involves more complicated, costly procedures.

Lead paint, asbestos, non-grounded outlets and galvanized pipes are a few of the defects particular to homes built before 1980.  The potential for health hazards and consequently law suits abounds.  If a seller is known to have seen a defect and ignored it, he or she can be sued for withholding information.

A licensed REALTOR® can guide you through these decisions. Like a trusted antique dealer who points out a drawer that sticks or a wobbly leg on a bureau, a seller who discloses even minor defects is seen as trustworthy. Although not legally required, a seller who hires a home inspector makes a sound decision that could potentially avoid legal issues later.  Even with that inspection in place, if I were representing the buyer, I would advise him or her to also hire an inspector. A second opinion is never a bad thing.

With good advice from your listing agent, you can confidently leave certain defects "as is" and repair other defects cost effectively.  As far as what you're legally required to divulge, most states require the seller to complete a Disclosure Form for their listed property.
 
In the past, it's been standard that sellers would disclose known defects. Recently, with certain defects, the law sometimes requires the homeowner to proactively find out if there's a problem or not.  Without sound advice, selling a home with a "defect in the property" is at best, risky business and at worst, a law suit waiting to happen.
Home sweet home may not be defect-free, but a good REALTOR® can guide you through the process and help you avoid legal problems that may haunt your average <a href="http://www.crazyvivhomes.com/blog/fsbo-right-for-yo/">FSBO</a> deal for years to come.

Comments

By Larry Tollen,  Wed Oct 20 2010, 08:15
Viv,

Nice article and spot on in terms of helping both Buyers and Sellers understand the ramifications of both trying FSBO (particuarly in our current marekt and given how wuickly people are to sue nowadays) and in admitting there are issues and then insisting on an "as-is" sale.

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