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The importance of thorough accuracy on your seller’s disclosure

On Behalf of | Dec 17, 2019 | Real Estate Transactions |

Real estate, including the home you live in, is one of the few investments that you can directly enjoy before reselling it for a potential profit. As with any other investment, the goal is often to buy a home for a low price and later sell it for a higher amount. Purchasing a property in mediocre or unmaintained condition and investing substantially in upgrades and modern amenities can help you maximize the return on the money spent on your home.

When it comes time to sell, you know you want to get as much money as possible, which means setting an asking price that is higher than what you paid but that is still fair based on the condition of the home and the sale price of other similar properties nearby. Whether there are issues due to age or caused by storm damage, buyers need to know about defects to make an informed choice.

It can feel tempting to minimize or omit known defects when the time comes to list a property for sale. Particularly if the issue isn’t blatantly obvious, it may seem easy enough for you to simply avoid telling potential buyers. However, unless you sell the home as-is, which could deter a lot of potential buyers, you have a legal obligation to disclose known issues with the property.

The seller’s disclosure is a critical form for buyers

When you look at a new home or property, its condition and the age and status of its various systems both play important roles in the price the seller can ask and the willingness of buyers to make aggressive offers on the property. A home with functional, modern systems will sell for much more money than a home that doesn’t have central air conditioning or needs a new roof.

Potential buyers will visit properties to see if they meet their standards and if they are capable of investing the time or effort necessary to repair or replace any damaged systems or fixtures. Most buyers depend both on information provided on the seller’s disclosure and the opinion of their real estate agent, as well as the information provided during an appraisal or inspection.

Especially in the case of cash purchases where the buyer waives their inspection rights, the accuracy and fairness of the seller’s disclosure are of critical importance.

Sellers who intentionally omit information can face consequences

When you sign the various forms involved with the listing of your home initially and then the sale of the property later, you are, in theory, opening yourself up to legal scrutiny for your claims. If a buyer makes an offer on the property and purchases your home, only to later find out that you misrepresented the condition of certain critical systems or intentionally avoided disclosing a known defect, they could take legal action against you to recoup the financial losses associated with those issues.

You might think that it would be hard for buyers to prove you had knowledge of a defect, However, anything from statements made by your former neighbors who know about the condition of your electrical system to previous quotes provided by local professionals to remediate the issue could serve as evidence of your knowledge of the problems with the property prior to closing.

It is always best to err on the side of caution and either fully disclose all known defects or to list the property in as-is condition. Discussing the specific property issues you have with an attorney familiar with Florida real estate transactions can help you determine which option will secure more offers and a better price on your home.